For what it's worth, this is from "Dallas" magazine, Nov 2010:
The decision to add the larger Boeings became even more appropriate following the AirTran deal. Southwest currently flies 547 Boeing 737-700s, and all but 25 have a 137-seat configuration requiring three flight attendants. The Boeing 737-800 has 175 seats (“with little more cost,” Kelly says) and necessitates a fourth flight attendant. But Kelly says the -800 is a better long-haul aircraft than the 737-700—so long as customer demand fills those additional 38 seats.
“We feel like we have the opportunity within the domestic U.S. route map that we operate to deploy somewhere around 70 737-800s,” Kelly says. “The purpose ... is to operate those flights more effectively and therefore more profitably.”
Besides Mexico and the Caribbean, Southwest also plans to expand to Hawaii, when the economics are right. “The -800 becomes not really an alternative aircraft, it almost becomes mandatory in those markets,” Kelly says. “The 737-700 is just not competitive enough, in my opinion, for those markets.”
D CEO : CEO of the Year (Again!): Gary Kelly of Southwest Airlines