Exhibit
10.1        
                                                                                                                                                                                                                                                                  CONFIDENTIAL
TREATMENT       

Supplemental Agreement No. 54

to

Purchase Agreement No. 1810

between

THE BOEING COMPANY

and

SOUTHWEST AIRLINES CO.

Relating to Boeing Model 737-7H4 Aircraft (the Aircraft)

THIS SUPPLEMENTAL AGREEMENT, entered into as of July 17, 2007, by and between
THE BOEING COMPANY, a Delaware corporation with principal offices in Seattle,
Washington, (Boeing) and SOUTHWEST AIRLINES CO., a Texas corporation with
principal offices in Dallas, Texas (Buyer);

WHEREAS, the parties hereto entered into Purchase Agreement No. 1810 dated
January 19, 1994, relating to Boeing Model 737-7H4 aircraft (the Agreement) and;

WHEREAS, Buyer has agreed to the following changes to the Contract Delivery
Month of certain four (4) Block T-W-2a Firm Aircraft (Four Firm Aircraft):

Was                                       New
***                                       ***

and;

WHEREAS, Buyer has agreed to exercise certain twenty-five (25) Option Aircraft
into Firm Aircraft (Block T-W-2 Aircraft) scheduled for delivery in the Contract
Delivery Month as follows (Twenty-Five Firm Aircraft):

*** Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and
has been filed separately with the Securities and Exchange Commission pursuant
to a Confidential Treatment Application filed with the Commission.

P.A.  No.  1810                             SA-54-1
K/SWA

--------------------------------------------------------------------------------

Was - Option                                                 New - Firm
***                                       ***

and;

WHEREAS,***;

NOW THEREFORE, in consideration of the mutual covenants herein contained, the
parties agree to amend the Agreement as follows:

1.  The Table of Contents of the Agreement is deleted in its entirety and a new
Table of Contents is attached hereto and incorporated into the Agreement by this
reference.

2.  
Table 1 is deleted in its entirety and replaced by a new Table 1 which is
attached hereto and is incorporated into the Agreement by this reference.

 
3.  
Table 2 is deleted in its entirety and replaced by a new Table 2 which is
attached hereto and is incorporated into the Agreement by this reference.

 
4.       Letter Agreement No. 6-1162-JMG-669R7 entitled *** is replaced and
superseded by Letter Agreement No. 6-1162-JMG-669R8 attached hereto.

5.      All references in the Letter Agreements associated with Purchase
Agreement No. 1810 shall be deemed to refer to the purchase by Buyer of four
hundred (400) Model 737-7H4 Aircraft, eighty-six (86) Model 737-7H4 Option
Aircraft and fifty-four (54) Model 737-7H4 Purchase Right Aircraft, to the
extent such reference is not specifically addressed herein.

Upon execution of this Supplemental Agreement on or before July 31, 2007, Boeing
will return to Buyer *** which are advance payments for the Four Firm Aircraft
paid by Buyer less advance payments due on the Twenty-Five Firm Aircraft.

The Agreement will be deemed to be supplemented to the extent herein provided
and as so supplemented will continue in full force and effect.

EXECUTED IN DUPLICATE as of the day and year first above written.

THE BOEING COMPANY
SOUTHWEST AIRLINES CO.
           
By: /s/ Nobuko Wiles
By:/s/ Laura Wright
   
Its:    Attorney-In-Fact
Its:SVP Finance & CFO

P.A.  No.  1810                             SA-54-2
K/SWA

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

   
Page
SA
   
Number
Number
       
ARTICLES
                     
1.
Subject Matter of Sale
1-1
SA-13
       
2.
Delivery, Title and Risk of Loss
 2-1
 SA-28
       
3.
Price of Aircraft
3-1
SA-47
       
4.
Taxes
4-1
         
5.
Payment
5-1
         
6.
Excusable Delay
6-1
         
7.
Changes to the Detail Specification
 7-1
 SA-1
       
8.
Federal Aviation Requirements and Certificates and Export License
 8-1
         
9.
Representatives, Inspection, Flights and Test Data
 9-1
         
10.
Assignment, Resale or Lease
10-1
     
 
 
11.
Termination for Certain Events
11-1
         
12.
Product Assurance; Disclaimer and Release; Exclusion of Liabilities:
     
Customer Support; Indemnification and Insurance
 12-1
         
13.
Buyer Furnished Equipment and Spare Parts
 13-1
         
14.
Contractual Notices and Requests
14-1
         
15.
Miscellaneous
15-1
         

P.A.  No. 
1810                                                                                                 
i                                                                                                       
SA-54
K/SWA

--------------------------------------------------------------------------------

TABLE OF CONTENTS CON'T

   
SA
   
Number
     
TABLE
         
1.
Aircraft Information Table
SA-54
     
2.
Option Aircraft Information Table
SA-54

 
EXHIBITS

A
Aircraft Configuration
 
SA-47
       
B
Product Assurance Document
 
SA-1
       
C
Customer Support Document
           
D
Price Adjustments Due to Economic Fluctuations - Aircraft
           
E
Buyer Furnished Equipment
     
Provisions Document
           
F
Defined Terms Document
           

               LETTER AGREEMENTS

1810-1
Waiver of Aircraft Demonstration Flight
 

P.A.  No. 
1810                                                                                                 
ii                                                                                                       
SA-54
K/SWA

--------------------------------------------------------------------------------

TABLE OF CONTENTS CON'T

   
SA
   
Number
RESTRICTED LETTER AGREEMENTS
             
6-1162-RLL-932R2
Promotional Support
SA-13
     
6-1162-RLL-933R20
Option Aircraft
SA-47
     
6-1162-RLL-934R3
Disclosure of Confidential Information
SA-14
     
6-1162-RLL-935R1
Performance Guarantees
SA-1
     
6-1162-NIW-890
***-
SA-39
           
6-1162-RLL-936R4
Certain Contractual Matters
SA-4
     
6-1162-RLL-937
Alternate Advance Payment Schedule
       
6-1162-RLL-938
***
       
6-1162-RLL-939R1
Certification Flight Test Aircraft
SA-1
     
6-1162-RLL-940R1
Training Matters
SA-1
     
6-1162-RLL-941R2
Other Matters
SA-13
     
6-1162-RLL-942
Open Configuration Matters
       
6-1162-RLL-943R1
Substitution Rights
SA-6
     
6-1162-RLL-944
***
             
6-1162-RLL-945
Comparison of 737-7H4 and 737-3H4 Block Fuel Burn
       
6-1162-RLL-1855R3
Additional Contractual Matters
SA-4
     
6-1162-RLL-1856
***
SA-1
     
6-1162-RLL-1857
Service Ready Validation Program Field Test
SA-1
     
6-1162-RLL-1858R1
Escalation Matters
SA-4

P.A.  No. 
1810                                                                                                 iii
                                                                                                       
SA-54
K/SWA

--------------------------------------------------------------------------------

TABLE OF CONTENTS CON'T

   
SA
   
Number
RESTRICTED LETTER AGREEMENTS
             
6-1162-RLL-2036
Amortization of Costs for Customer Unique Changes
SA-1      
6-1162-RLL-2037
Reconciliation of the Aircraft Basic Price
SA-1
     
6-1162-RLL-2073
Maintenance Training Matters
SA-1
     
6-1162-KJJ-054R1
Business Matters
       
6-1162-KJJ-055R1
Structural Matters
SA-25
     
6-1162-KJJ-056
Noise and Emission Matters
SA-13
     
6-1162-KJJ-057
Product Development Matters
SA-13
     
6-1162-KJJ-058
Additional Substitution Rights
SA-13
     
6-1162-KJJ-150
Flight Control Computer & Mode Control Panel Spares Matter
SA-14
     
6-1162-MSA-185R3
Delivery Change Contractual Matters
SA-21
     
6-1162-JMG-669R8
***
SA-54
     
6-1162-JMG-747R1
***
SA-36
     
6-1162-CHL-217
Rescheduled Flight Test Aircraft
SA-32
     
6-1162-NIW-606R1
***
SA-36
           
6-1162-NIW-640
Early Delivery of Two April 2004 Aircraft
SA-35
     
6-1162-NIW-889
Warranty - Exterior Color Schemes and Markings for YA143 and on
SA-39
     
6-1162-NIW-1142
***
SA-43
     
6-1162-NIW-1369
***
SA-46

P.A.  No. 
1810                                                                                                 
iv                                                                                                       
SA-54
K/SWA

--------------------------------------------------------------------------------

 
Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

   
Base Aircraft Price
Special Features
Aircraft Basic Price
Base Year Dollars
Block A, B, C, D & E Aircraft
***
***
***
July 1992
Block F & G Aircraft
***
***
***
July 1992
Block H Aircraft
***
***
***
July 1992
Block I Aircraft
***
***
***
July 1992
Block J Aircraft
***
***
***
July 1992
Block K Aircraft
***
***
***
July 1992
Block K-W Aircraft
***
***
***
July 1992
Block L Aircraft
***
***
***
July 1992
Block T Aircraft
***
***
***
July 1999
Block T-W Aircraft
***
***
***
July 1999
Block T-W-1 / T-W-1a Aircraft
***
***
***
July 1999
Block T-W-2 / T-W-2a Aircraft
***
***
***
July 1999
           
Block K-W Aircraft: Block K airplanes with production winglets installation
   
Block T-W Aircraft: Block T airplanes with production winglets installation
   
Block T-W-1 / T-W-1a  Aircraft: Firm Aircraft contracted to deliver from May 1,
2006 through June 2008 at the signing
 of SA-47  -- (T-W-1a Aircraft -- Advance Payment Schedule per LA
6-1162-JGM-669)
   
Block T-W-2 / T-W-2a Aircraft: U-W-1 Option Aircraft which becomes Firm Aircraft
after signing of SA-47 and
 
Firm Aircaft contracted to deliver in July 2008 and on at the signing of SA47 --
   
(T-W-2a Aircraft -- Advance Payment Schedule per LA 6-1162-JGM-669)
   

 
SWA                                                                                                             
Page
1                                                                                                  
SA-54

--------------------------------------------------------------------------------

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table

     
Escalation Estimate
 
Delivery
Number of
Aircraft
Adv Payment Base
 
Date
Aircraft
Block
Price Per A/P
Serial Number
Dec-2000
2
E
***
 
Jan-2001
1
E
***
 
Feb-2001
1
E
***
 
Mar-2001
2
E
***
 
Jun-2001
3
E
***
 
Sep-2001
3
E
***
 
Oct-1998
1
F
***
 
Nov-1998
2
F
***
 
Dec-1998
2
F
***
 
Mar-1999
2
G
***
 
Jun-1999
2
H
***
 
Jul-1999
1
H
***
 
Aug-1999
1
H
***
 
Sep-1999
2
H
***
 
Oct-1999
1
H
***
 
Mar-2000
1
H
***
 
Apr-2000
2
H
***
 
Sep-2000
1
H
***
 
Oct-2000
2
H
***
 
Mar-2001
2
H
***
 
Apr-2001
1
H
***
 
Oct-2001
3
H
***
 
Nov-2001
2
I
***
 
Dec-2001
1
I
***
 
Jan-2002
1
I
***
 
Mar-2002
4
I
***
 
Apr-2002
2
I
***
 
Dec-2002
2
I
***
 
May-2003
1
I
***
 
Jun-2003
2
I
***
 
Jul-2003
1
I
***
 
Aug-2003
1
I
***
 
Sep-2003
3
I
***
 
Nov-2002
1
J
***
 
Dec-2002
1
J
***
 
Nov-2003
2
J
***
 
Dec-2003
2
J
***
 
Mar-2004
1
J
***
 
Mar-2004
1
K
***
 
Apr-2004
3
K
***
 
May-2004
1
K
***
 
Jun-2004
2
K
***
 
Jul-2004
2
K
***
 
Sep-2004
1
K-W
***
 

 
SWA                                                                                                             
Page 2                                                                                                  
SA-54

--------------------------------------------------------------------------------

 
Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table
Oct-2004
4
K-W
***
 
Oct-1999
1
L
***
 
Nov-1999
2
L
***
 
Dec-1999
1
L
***
 
Jun-2000
3
L
***
 
Jul-2000
3
L
***
 
Sep-2000
1
L
***
 
Oct-2000
1
L
***
 
Nov-2000
4
L
***
 
Dec-2000
1
L
***
 
Jan-2001
1
L
***
 
Feb-2001
1
L
***
 
Jul-2001
1
L
***
 
Sep-2001
1
L
***
 
Oct-2001
1
L
***
 
Mar-2003
2
L
***
 
Jul-2003
1
L
***
 
Aug-2003
2
L
***
 
Nov-2001
1
T
***
 
Feb-2002
1
T
***
 
Jan-2004
2
T
***
 
Feb-2004
1
T
***
 
Apr-2004
3
T
***
 
May-2004
1
T
***
 
Jun-2004
6
T
***
 
Jul-2004
2
T
***
 
Aug-2004
6
T-W
***
 
Sep-2004
4
T-W
***
 
Oct-2004
0
T-W
***
 
Nov-2004
3
T-W
***
 
Dec-2004
3
T-W
***
 
Jan-2005
5
T-W
***
 
Feb-2005
3
T-W
***
 
Mar-2005
4
T-W
***
 
Apr-2005
4
T-W
***
 
May-2005
2
T-W
***
 
Jun-2005
4
T-W
***
 
Jul-2005
2
T-W
***
 
Aug-2005
2
T-W
***
 
Sep-2005
3
T-W
***
 
Oct-2005
2
T-W
***
 
Nov-2005
2
T-W
***
 
Dec-2005
1
T-W
***
 
Jan-2006
1
T-W
***
 
Feb-2006
4
T-W
***
 
Mar-2006
3
T-W
***
 
Apr-2006
2
T-W
***
 
May-2006
5
T-W-1
***
 

SWA                                                                                                             
Page 3                                                                                                  
SA-54

--------------------------------------------------------------------------------

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table
Jun-2006
5
T-W-1
***
 
Jul-2006
3
T-W-1
***
 
Aug-2006
3
T-W-1
***
 
Sep-2006
3
T-W-1
***
 
Oct-2006
1
T-W-1
***
 
Nov-2006
2
T-W-1
***
 
Dec-2006
2
T-W-1
***
 
Jan-2007
2
T-W-1
***
 
Feb-2007
3
T-W-1
***
 
Mar-2007
2
T-W-1
***
 
Apr-2007
3
T-W-1
***
 
May-2007
3
T-W-1
***
 
Jun-2007
2
T-W-1
***
 
Jun-2007
1
T-W-1a
***
36528
Jul-2007
2
T-W-1
***
 
Jul-2007
1
T-W-1a
***
36610
Aug-2007
2
T-W-1
***
 
Aug-2007
3
T-W-1a
***
36611, 36632 & 36633
Sep-2007
2
T-W-1
***
 
Sep-2007
1
T-W-1a
***
36612
Oct-2007
2
T-W-1
***
 
Oct-2007
1
T-W-1a
***
36613
Nov-2007
2
T-W-1
***
 
Nov-2007
1
T-W-1a
***
36614
Dec-2007
2
T-W-1
***
 
Dec-2007
1
T-W-1a
***
36615
Jan-2008
1
T-W-1
***
 
Jan-2008
2
T-W-1a
***
36616 & 36617
Jan-2008
1
T-W-2
***
36887
Feb-2008
1
T-W-1
***
 
Feb-2008
3
T-W-1a
***
36618, 36619 & 36620
Mar-2008
1
T-W-1
***
 
Mar-2008
2
T-W-1a
***
36621 & 36622
Mar-2008
1
T-W-2
***
36888
Apr-2008
1
T-W-1
***
 
Apr-2008
2
T-W-1a
***
36623 & 36624
May-2008
1
T-W-1
***
 
May-2008
2
T-W-1a
***
36625 & 36626
Jun-2008
1
T-W-1
***
 
Jun-2008
2
T-W-1a
***
36627 & 36628
Jul-2008
2
T-W-2a
***
 
Jul-2008
2
T-W-2
***
36889 & 36890
Aug-2008
1
T-W-2
***
36891
Oct-2008
1
T-W-2a
***
 
Nov-2008
1
T-W-2a
***
 
Dec-2008
1
T-W-2a
***
 
Jan-2009
1
T-W-2a
***
 
Feb-2009
2
T-W-2a
***
 

 
SWA                                                                                                             
Page 4                                                                                                  
SA-54

--------------------------------------------------------------------------------

 
Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table
Mar-2009
2
T-W-2a
***
 
Apr-2009
2
T-W-2a
***
 
May-2009
2
T-W-2a
***
 
Jun-2009
2
T-W-2a
***
 
Jul-2009
2
T-W-2a
***
 
Aug-2009
1
T-W-2a
***
 
Sep-2009
1
T-W-2a
***
 
Oct-2009
1
T-W-2a
***
 
Nov-2009
1
T-W-2a
***
 
Dec-2009
1
T-W-2a
***
 
Jan-2010
1
T-W-2a
***
 
Feb-2010
1
T-W-2a
***
 
Mar-2010
1
T-W-2a
***
 
Apr-2010
1
T-W-2a
***
 
May-2010
1
T-W-2a
***
 
Jun-2010
1
T-W-2a
***
 
Jul-2010
1
T-W-2a
***
 
Aug-2010
1
T-W-2a
***
 
Sep-2010
1
T-W-2a
***
 
Oct-2010
1
T-W-2a
***
 
Jan-2011
1
T-W-2a
***
 
Feb-2011
1
T-W-2a
***
 
Mar-2011
1
T-W-2a
***
 
Apr-2011
1
T-W-2a
***
 
May-2011
1
T-W-2a
***
 
Jun-2011
1
T-W-2a
***
 
Jul-2011
1
T-W-2a
***
 
Aug-2011
1
T-W-2a
***
 
Sep-2011
1
T-W-2a
***
 
Oct-2011
1
T-W-2a
***
 
Jan-2012
1
T-W-2a
***
 
Feb-2012
1
T-W-2a
***
 
Mar-2012
1
T-W-2a
***
 
Apr-2012
1
T-W-2a
***
 
May-2012
1
T-W-2a
***
 
Jun-2012
1
T-W-2a
***
 
Jul-2012
1
T-W-2a
***
 
Aug-2012
1
T-W-2a
***
 
Sep-2012
1
T-W-2a
***
 
Oct-2012
1
T-W-2a
***
 
Jan-2013
2
T-W-2a
***
 
Feb-2013
1
T-W-2a
***
 
Mar-2013
1
T-W-2a
***
 
Mar-2013
1
T-W-2
***
 
Apr-2013
1
T-W-2
***
 
May-2013
1
T-W-2
***
 
Jun-2013
2
T-W-2
***
 
Jul-2013
1
T-W-2
***
 

SWA                                                                                                             
Page 5                                                                                                  
SA-54

--------------------------------------------------------------------------------

Table 1 to
Purchase Agreement No. 1810
Aircraft Information Table
Aug-2013
2
T-W-2
***
 
Sep-2013
2
T-W-2
***
 
Oct-2013
2
T-W-2
***
 
Nov-2013
1
T-W-2
***
 
Dec-2013
2
T-W-2
***
 
Jan-2014
1
T-W-2
***
 
Feb-2014
1
T-W-2
***
 
Mar-2014
1
T-W-2
***
 
Apr-2014
1
T-W-2
***
 
May-2014
1
T-W-2
***
 
Jun-2014
1
T-W-2
***
 
Jul-2014
1
T-W-2
***
 
Aug-2014
1
T-W-2
***
 
Sep-2014
1
T-W-2
***
 
Oct-2014
1
T-W-2
***
 

SWA                                                                                                             
Page 6                                                                                                  
SA-54

--------------------------------------------------------------------------------

 

Table 2 to Purchase Agreement No. 1810
(Letter Agreement No. 6-1162-RLL-933R20)
Option Aircraft Information Table
Price Description of Option Aircraft:
         
Base Aircraft Price
Special Features
Aircraft Basic Price
Base Year Dollars
Block U Option Aircraft
***
***
***
July 1999
(without Winglets)
       
Block U-W Option Aircraft
***
***
***
July 1999
(with Winglets)
       
Block U-W-1 Option Aircraft
***
***
***
July 1999
                       
Delivery of Purchase Right Aircraft:
Quantity
54
 
Delivery Period of Purchase Right Aircraft:
Complete delivery not later than Dec. 31, 2014
Condition of Offer for Purchase Right Aircraft:
Subject to Available Position
                                     
Remaining Option Aircraft:
 
86
   

 
 
SWA                                                                                                             
Page
1                                                                                                  
SA-54

--------------------------------------------------------------------------------

 
Table 2 to Purchase Agreement No. 1810
(Letter Agreement No. 6-1162-RLL-933R20)
Option Aircraft Information Table

Aircraft
Number of
Option
Adv Payment Base
 
Delivery
Option
Aircraft
Price Per
 
Mo. & Yr.
Aircraft
Block
Option Aircraft
Option Exercise
Apr-2009
2
U-W-1
***
December 3, 2007
May-2009
1
U-W-1
***
January 1, 2008
Jun-2009
1
U-W-1
***
February 1, 2008
Jul-2009
2
U-W-1
***
March 3, 2008
Aug-2009
1
U-W-1
***
April 1, 2008
Oct-2009
1
U-W-1
***
June 2, 2008
Nov-2009
1
U-W-1
***
July 1, 2008
Dec-2009
1
U-W-1
***
August 1, 2008
Jan-2010
1
U-W-1
***
September 1, 2008
Feb-2010
1
U-W-1
***
October 1, 2008
Mar-2010
1
U-W-1
***
November 3, 2008
Apr-2010
1
U-W-1
***
December 1, 2008
May-2010
2
U-W-1
***
January 1, 2009
Jun-2010
3
U-W-1
***
February 2, 2009
Jul-2010
2
U-W-1
***
March 2, 2009
Aug-2010
2
U-W-1
***
April 1, 2009
Sep-2010
2
U-W-1
***
May 1, 2009
Oct-2010
3
U-W-1
***
June 1, 2009
Nov-2010
3
U-W-1
***
July 1, 2009
Dec-2010
3
U-W-1
***
August 3, 2009
Jan-2011
1
U-W-1
***
September 1, 2009
Feb-2011
2
U-W-1
***
October 1, 2009
Mar-2011
1
U-W-1
***
November 2, 2009
Apr-2011
1
U-W-1
***
December 1, 2009
May-2011
2
U-W-1
***
January 1, 2010
Jun-2011
2
U-W-1
***
February 1, 2010
Jul-2011
2
U-W-1
***
March 1, 2010
Aug-2011
2
U-W-1
***
April 1, 2010
Sep-2011
2
U-W-1
***
May 3, 2010
Oct-2011
2
U-W-1
***
June 1, 2010
Nov-2011
3
U-W-1
***
July 1, 2010
Dec-2011
2
U-W-1
***
August 2, 2010
Jan-2012
3
U-W-1
***
September 1, 2010
Feb-2012
3
U-W-1
***
October 1, 2010
Mar-2012
2
U-W-1
***
November 1, 2010
Apr-2012
3
U-W-1
***
December 1, 2010
May-2012
3
U-W-1
***
January 3, 2011
Jun-2012
3
U-W-1
***
February 1, 2011
Jul-2012
2
U-W-1
***
March 1, 2011
Aug-2012
2
U-W-1
***
April 1, 2011
Sep-2012
2
U-W-1
***
May 2, 2011
Oct-2012
2
U-W-1
***
June 1, 2011
Nov-2012
3
U-W-1
***
July 1, 2011
Dec-2012
2
U-W-1
***
August 1, 2011
Total
86
     

SWA                                                                                                             
Page 2                                                                                                  
SA-54

--------------------------------------------------------------------------------

 
 
 
                                                                                                                                                            The
Boeing Company
                                                                                                                                                               
P.O. Box 3707
                                                                                                                                                            
   Seattle, WA 98124-220
 

6-1162-JMG-669R8

Southwest Airlines Co.
P.O. Box 36611 - Love Field
Dallas, Texas  75235

Subject:
***

 

This Letter Agreement amends Purchase Agreement No. 1810 dated as of January 19,
1994 (the Agreement) between The Boeing Company (Boeing) and Southwest Airlines
Co. (Buyer) relating to Model 737 aircraft:
1) ***
2) ***
All terms used and not defined herein will have the same meaning as in the
Agreement.
1.           ***
2.           ***
3.           ***
4.           ***
5.           ***
6.           ***
7.           ***
8.           ***
9.           ***
10.         ***
11.         ***
12.         ***
13.         ***
14.         ***

15.           Confidential Treatment.

Buyer understands that certain commercial and financial information contained in
this Letter Agreement including any attachments hereto is considered by Boeing
as confidential.  Buyer agrees that it will treat this Letter Agreement and the
information contained herein as confidential and will not, without the prior
written consent of Boeing, disclose this Letter Agreement or any information
contained herein to any other person or entity except as provided in Letter
Agreement No. 6-1162-RLL-934, as amended.
 
 
P.A.  No. 
1810                                                                                                                                                                                                          
SA-54
K/SWA

--------------------------------------------------------------------------------

Southwest Airlines Co.
6-1162-JMG-669R8
 
Very truly yours,

THE BOEING COMPANY
     
By: /s/ Nobuko Wiles
 
Its:    Attorney-In-Fact

 
ACCEPTED AND AGREED TO this

date: July 17, 2007

SOUTHWEST AIRLINES CO.
     
By:/s/ Scott Topping
 
Its:VP Treasurer

 
P.A.  No. 
1810                                                                                                                                                                                                          
SA-54
K/SWA

--------------------------------------------------------------------------------

Southwest Airlines Co.
Attachment A to 6-1162-JMG-669R8
***

P.A.  No. 
1810                                                                                                                                                                                                          
SA-54
K/SWA

--------------------------------------------------------------------------------

Southwest Airlines Co.
Attachment B to 6-1162-JMG-669R8

***

 
 
P.A.  No. 
1810                                                                                                                                                                                                          
SA-54
K/SWA

--------------------------------------------------------------------------------

Southwest Airlines Co.
Attachment C to 6-1162-JMG-669R8
3400MK3098
 
Southwest Airlines
Co.                                                                                                                                       
                 Project ID:                                       48667 
                                                                                                                                                                                        Change
No.                           3400MK3098
                                                                                                                                                                                        Dated:                                  July
16, 2007
 
Model:
737-300/-500

Project Title:
AVIONICS UPGRADE - SECOND FLIGHT MANAGEMENT COMPUTER SYSTEM (FMCS) AND
INSTALLATION AND ACTIVATION OF DUAL GLOBAL POSITIONING SYSTEM SENSOR (GPSS) -
PHASE I

 
Description of Change:

 
BACKGROUND:

 
This effort shall be accomplished in two phases:

 Phase I - Second FMC installation and installation and activation of dual GPSS.
No Required Navigation Performance Special Aircraft and Aircrew Authorization
Required (RNP/SAAAR) capability will be provided during this phase.

 
Phase II - Installation of Large Area Displays with activation of RNP/SAAAR.

 
Each phase will be independently accomplished with a FAA certification and
Service Bulletin at the completion of each phase.

 
PHASE I REQUIREMENTS

 
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A. REVIEW SOUTHWEST AIRLINES (SWA) SUPPLEMENTAL TYPE CERTIFICATES (STCs) TO
DETERMINE ACCEPTABILITY FOR REFERENCE UNDER BOEING TYPE DESIGN

1.0 CUSTOMER INFORMATION

1.1 Contracting Party: Southwest Airlines (SWA)

1.2 Requesting Party: Boeing Technical Services & Modifications Avionics
Business Unit

2.0 PROJECT BACKGROUND

Southwest Airlines (SWA) is interested in implementing RNP/SAAAR and make the
flight-instrument panel look like the 737-NG for their 737 fleet.

3.0 STATEMENT OF WORK

3.1 Boeing will review customer provided data on LRU locations, installed by
STCs in order to avoid any conflict or interference with the Boeing design.

3.2 Boeing Deliverables to Customer:
The deliverables from this effort will be any findings that will affect the
implementation of the enclosed work-statement.  The findings will be
communicated to the customer, Southwest Airlines.

3.3 Customer is responsible for delivery of all data on LRU locations installed
by STCs that may impact the areas of change.  Also, the Customer will be
responsible for the re-certification of any impacted STC as a result of the
modification installations.

 
P.A.  No. 
1810                                                                                                                                                                                                          
SA-54
K/SWA

--------------------------------------------------------------------------------

Southwest Airlines Co.
Attachment C to 6-1162-JMG-669R8
3400MK3098

------------------------------------------------------------------------------------------------------------------------------------------------------
B. NAVIGATION - DUAL FLIGHT MANAGEMENT COMPUTER SYSTEM (FMCS) - INSTALLATION

***

EQUIPMENT NOTES:

***

PREREQUISITE NOTES

***

ASSUMPTIONS NOTES

:***

C. FLIGHT MANAGEMENT COMPUTER SYSTEM (FMCS) - GPS ENABLE - FEATURE ACTIVATION

***

PREREQUISITE NOTES

***

ASSUMPTIONS NOTES:

***

D. DUAL GPSS – ROCKWELL COLLINS GPSS P/N 822-2189-001 – INSTALLATION

***

EQUIPMENT NOTES:

***

PREREQUISITE NOTES:

***

ASSUMPTIONS NOTES:

**

*E. PROGRAM INTEGRATED AIRPLANE TEST, VALIDATION, & CERTIFICATION

***

REMOTE CERTIFICATION NOTES:

***

P.A.  No. 
1810                                                                                                                                                                                                          
SA-54
K/SWA

--------------------------------------------------------------------------------

Southwest Airlines Co.
Attachment C to 6-1162-JMG-669R8
3400MK3098
 
Special Notes:
Additional feature activation requires separate projects.

Additional Project Estimating Notes:

The following projects are listed to help with estimating this project.

TECHNICAL SERVICES AGREEMENT - REVIEW SOUTHWEST AIRLINES (SWA) SUPPLEMENTAL TYPE
CERTIFICATES (STCs) TO DETERMINE ACCEPTABILITY FOR REFERENCE UNDER BOEING TYPE
DESIGN (ref PID-26454)

NAVIGATION - DUAL FLIGHT MANAGEMENT COMPUTER SYSTEM (FMCS) - LEAN GLOBAL
ENTERPRISE - INSTALLATION SUPPORTING RNAV & RNAV (GPS) OPERATIONAL CAPABILITY
(ref PID-43332)

FLIGHT MANAGEMENT COMPUTER SYSTEM (FMCS) - GPS ENABLE - FEATURE ACTIVATION (PID-
47210)

DUAL GNSSU - HONEYWELL KGS 200 - INSTALLATION – CERTIFICATION (PID- 43333)

LARGE AREA DISPLAY SYSTEM - SMITHS INDUSTRIES - INSTALLATION OF BFE SMART
DISPLAY UNITS (DUAL CHANNEL) ON NON-EFIS AIRPLANES, INTEGRATED STANDBY FLIGHT
DISPLAY (ISFD) (ref PID-26496)

FLIGHT MANAGEMENT COMPUTER SYSTEM - (RNP/SAAAR, GLS CAT I & IAN) -
IMPLEMENTATION AND CERTIFICATION (ref PID-26501)

PROGRAM INTEGRATED AIRPLANE TEST, VALIDATION, & CERTIFICATION (ref PID-26529)

Material/Equipment List:

Similar To                      Part
Number                                                         CAT             
Part Qty                                Part
Description                                                      Supplier Name

 
S242A600-1001
BFE
1
CDU
   
10-62225-003
BFE
1
FMC
   
TBD
BFE
1
WXR Control Panel
   
822-2189-001
BFE
2
GNS 4000S
   
822-2033-001
BFE
2
GNS ANTENNA
   
69-73713-17
BFE
1
Mode Select Panel
   
69-37399-12
BFE
2
IRS MASTER CAUTION UNIT
 

 

 
P.A.  No. 
1810                                                                                                                                                                                                          
SA-54
K/SWA

--------------------------------------------------------------------------------

Southwest Airlines Co.
Attachment C to 6-1162-JMG-669R8
3461MK3017

Southwest Airlines
Co.                                                                                                                                                                                                             
Project ID:                                                   48668
                                                                                      Change
No:                                    3100MK3017
                                                                                      
Dated:                                             July 16, 2007

Model:                      737-300/-500

Project Title:      AVIONICS UPGRADE - INSTALL LARGE AREA DISPLAY SYSTEM (LADS)
AND ACTIVATION OF REQUIRED NAVIGATION PERFORMANCE SPECIAL AIRCRAFT AND AIRCREW
AUTHORIZATION REQUIRED (RNP/SAAAR) - PHASE II

Description of Change:
BACKGROUND:
This effort shall be accomplished in two phases:
Phase I - Second FMC installation and installation and activation of dual GNSS.
No Required Navigation Performance Special Aircraft and Aircrew Authorization
Required (RNP/SAAAR) capability will be provided during this phase.

Phase II - Installation of Large Area Displays with activation of RNP/SAAAR.

Each phase will be independently accomplished with a FAA certification and
Service Bulletin at the completion of each phase.

PHASE II REQUIREMENTS
------------------------------------------------------------------------------------------------------------------------------------------------------
A. REVIEW SOUTHWEST AIRLINES (SWA) SUPPLEMENTAL TYPE CERTIFICATES (STCs) TO
DETERMINE ACCEPTABILITY FOR REFERENCE UNDER BOEING TYPE DESIGN

1.0 CUSTOMER INFORMATION

1.1 Contracting Party: Southwest Airlines (SWA)

1.2 Requesting Party: Boeing Technical Services & Modifications Avionics
Business Unit

2.0 PROJECT BACKGROUND

Southwest Airlines (SWA) has requested a proposal to upgrade their 737-300/-500
fleet   to include GPS (RNAV) and RNP/SAAR capability. The changes requested
include an upgrade to the Flight Deck with a Large Area Display System (LADS)
that will be similar to their 737NG aircraft.

3.0 STATEMENT OF WORK

***

B. LARGE AREA DISPLAY SYSTEM - SMITHS INDUSTRIES - INSTALLATION OF BFE SMART
DISPLAY UNITS (DUAL CHANNEL) ON NON-EFIS AIRPLANES AND INTEGRATED STANDBY
INSTRUMENT SYSTEM (ISIS)

***

Equipment Notes:

***

P.A.  No. 
1810                                                                                                                                                                                                          
SA-54
K/SWA

--------------------------------------------------------------------------------

Southwest Airlines Co.
Attachment C to 6-1162-JMG-669R8
3461MK3017
 
Assumption Notes:

***

C. AVIONICS UPGRADE to COMPLY WITH RNP/SAAAR REQUIREMENTS (REF.AC90-101)

The following equipment upgrades in addition to the Large Area Display System
are required to implement RNP SAAAR requirements.

Flight Control Computer (FCC):

An update to the existing -4 FCC is required to introduce RNP/SAAAR capability
as well as other FCC functions deemed necessary to ensure RNP/SAAAR
implementation is operationally common with the 737NG.  FCC updates are required
to ensure appropriate communication exists between the FCC, FMC, and Large
Display System for RNP/SAAAR capture and deviation commands.

***

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
D. PROGRAM INTEGRATED AIRPLANE TEST, VALIDATION, & CERTIFICATION

This project captures all of the integrated flight test and certification
activity associated with the following system incorporation into SWA 737-300/500
fleet.

Phase II Certification Activity

***

REMOTE CERTIFICATION NOTES:

***

Material/Equipment List:

Similar To                      Part
Number                                                         CAT             
Part Qty                      Part
Description                                                      Supplier Name

 
10-62038-new
BFE
2
Flight Control Computer
   
TBD
BFE
2
Smart Display Unit
   
TBD
BFE
2
EFIS Control Panel
   
TBD
BFE
1
ISDS (Integrated Standby Display System)
   
TBD
BFE
1
Dedicated Battery Charger
   
TBD
BFE
1
OPS, Smart Display
   
980-4700-042
BFE
 
Digital Flight Data Recorder
   
967-0212-001
BFE
 
Digital Flight Data Acquisition Unit
   
TBD
BFE
2
Display Control Panel
 

 

 
P.A.  No. 
1810                                                                                                                                                                                                          
SA-54
K/SWA

--------------------------------------------------------------------------------

Southwest Airlines Co.
Attachment C to 6-1162-JMG-669R8
3162MK3580

Southwest Airlines Co.
                          Project ID:
47917
                          Change No:
3162MK3580
                          Dated:
5/25/2007

Model:
737-700                                                                                                                                                                                                                                                                 

Project Title:
COMMON DISPLAY SYSTEM - NAVIGATION PERFORMANCE SCALES - ENABLE
 

Description of Change:
Provide an FAA approved service bulletin and required Common Display System
(CDS) and Flight Management Computer System (FMCS) Operational Program
Configuration (OPC) software diskettes to enable the Navigation Performance
Scales (NPS) feature.

Feature Notes:

***

Material/Equipment List:
Similar To
Part Number
CAT           
Part Qty
Part Description                                
Supplier Name
þ
998-2512-504
BFE
1
DFDAU Mandatory Software (disk 963-2000-025)
Honeywell
þ
998-2513-504
BFE
1
DFDAU 429 Broadcast Software (disk 963-2100-025)
Honeywell
þ
L034870003
BFE
1
DFDAU Software (disk 360-03834-003)
SAGEM
þ
3102-TDY-M14-01
BFE
1
DFDAU Software (disk 2237274-06) (requires -8XX LRU part number)
Teledyne

Note: ***
 
 
P.A.  No. 
1810                                                                                                                                                                                                          
SA-54
K/SWA

--------------------------------------------------------------------------------

Southwest Airlines Co.
Attachment C to 6-1162-JMG-669R8
3461MK3AIY

Southwest Airlines Co.
                       Project ID:
47918
                       Change No:
3461MK3AIY
                       Dated:
5/25/2007

Model:
737-700                                                                                                         

Project Title:
FLIGHT MANAGEMENT COMPUTER SYSTEM (FMCS) - FEATURE REVISIONS

Description of Change:
Provide an FAA approved service bulletin and Flight Management Computer System
(FMCS) Operational Program Configuration (OPC) software, and/or wiring
instructions, as required, to enable the following features in the FMC:

***

Material/Equipment List:
Similar To
Part Number
CAT
Part Qty
Part Description                                
Supplier Name
þ
4082260-939 (Boeing Spec #: 10-62038-239)
BFE
1
Mode Control Panel
Honeywell

Note: ***

 

 
P.A.  No. 
1810                                                                                                                                                                                                          
SA-54
K/SWA

--------------------------------------------------------------------------------