Southwest Airlines has agreed to buy 208 Boeing 737s to modernise its all-Boeing fleet.

The $19bn deal includes 150 737 MAX airplanes and 58 Next-Generation 737s.

Boeing said the 737 MAX is expected to reduce fuel burn and carbon dioxide emissions, and will have the lowest operating costs in the single-aisle segment.

Southwest will be first of Boeing’s 13 customers to order new version of the airplane, with deliveries expected in 2017.

The deal with Southwest increases 737 MAX orders to more than 900 aricraft, while the Next-Generation 737 family has won orders for more than 6,600 aircraft, according to Boeing.

Boeing Commercial Airplanes president and CEO Jim Albaugh said: "Throughout our 40-year relationship, our two companies have collaborated to launch the 737-300, 737-500 and the Next-Generation 737-700 – affirming the 737 as the world’s preferred single-aisle airplane. As launch customer for the 737 MAX, Southwest, Boeing and the 737 continue that legacy."

In addition, GE Aviation has secured a $4.7bn engine order from Southwest Airlines to power 208 Boeing 737 aircraft with CFM International’s advanced LEAP-1B engine.

The LEAP engines combine advanced aerodynamic design techniques with lighter and more durable materials, and leading-edge environmental technologies.

The 737 MAX will achieve an equivalent reduction in carbon emissions, a 50% reduction in nitrous oxide emissions compared with current ICAO CAEP/6 requirements and a 75% reduction in the aircraft noise footprint.

The two companies will work together in 2012 to optimise the engine design for the new 737.