Kelly has definitely changed his tune about the 717 as of late. I think it is all tied into what he sees as a crumbling economy. It most definitely seems he is wanting to make a deal with Boeing Capital to return the 717's. It also seems he is wanting 737 replacements. Who knows how it will all shake out in the end, but it definitely seems that 6 months ago he was comfortable operating the 717's until the leases ran out, now not so much.

"It's a fine airplane, Kelly said, but Southwest's larger 737-700s and 737-800s can accomplish much the same task, and better.
Southwest was already talking to Boeing about future orders. Southwest had been pushing Boeing to come up with a more fuel efficient airplane, whether through an all new replacement for the 737s or with re-engining.
Since most of the AirTran's 717s are leased from Boeing, Southwest can talk to Boeing about taking the airplanes back as part of a larger deal. Kelly indicated that the future of the 717s is part of Southwest's discussions with Boeing."


And, it looks like the more fuel efficient 737 has arrived.



"Boeing will proceed with development of the re-engined 737 after its board of directors approved its launch based on order commitments for 496 aircraft from five airlines.

Boeing said that it has seen “overwhelming demand” for the new aircraft. It promised a fuel burn 4% lower than the Airbus A320neo.




The new 737-family will be powered by CFM International LEAP-1B engines."