07:54 AM EST, 01/07/2025 (MT Newswires) -- Southwest Airlines ( LUV ) has signed a sale and leaseback agreement with Babcock & Brown Aircraft Management, a global aircraft leasing manager, for 36 Boeing ( BA ) 737-800 aircraft, the companies said Tuesday.

Incline Aviation III, BBAM's flagship aviation investment fund, will own and lease the aircraft to Southwest ( LUV ), the companies said.

Southwest CFO Tammy Romo said the deal will generate cash to fund fleet modernization and offset capital expenditures as part of the airline's capital allocation strategy.