American low-cost carrier Southwest Airlines has confirmed it will defer the purchase of 30 Boeing 737-800 aircraft for four years.

Dallas-based Southwest said it would move 20 scheduled plane deliveries from 2013 and ten from 2014 to 2017 and 2018 respectively.

The policy is aimed at saving more than $1 billion in capital spending.

“Until we hit our return on capital target we do not plan to grow our fleet,” Southwest chief executive Gary Kelly told the annual shareholder meeting.

At the same meeting, the airline said its board has raised the quarterly dividend to one cent per share from the prior level of less than half a penny.

An increase in the company’s share buyback program to $1 billion from $500 million has also been approved.

“Repurchases will be made in accordance with applicable securities laws from time to time in open market or private transactions, depending on market conditions, and may be discontinued at any time,” read a statement from the company.

[stock]LUV|1m|right|Southwest Airlines up following news[/stock]

Transport Workers Union

In other Southwest Airlines news, the carrier confirmed it had reached a tentative agreement with the Transport Workers Union over new contracts for the 180 dispatchers it employs.

The tentative agreement is for a new, five-year contract through November 2014, and will be presented to all Southwest Dispatchers pending a final review and approval from the TWU board of directors.

“I am extremely proud of both negotiation teams and their dedication in accomplishing this important task,” said Matt Hafner, Southwest Airlines vice president of the operations coordination centre, which includes the Dispatchers.

“This tentative agreement represents hours of hard work and I’m pleased to say is mutually beneficial for not only our hard-working Dispatchers, but also the entire Company, our Customers, and our Shareholders during this challenging economic time in the airline industry.”

In early 2011, the Carrier sought assistance from the National Mediation Board (NMB) through the mediation process as defined by the Railway Labor Act.