Boeing extended its sales streak of 737 Max jets as Alaska Air Group boosted an order agreement to 68 jets and announced plans to return to a fleet with a single aircraft type.
The airline will return its Airbus A320-family planes, which it got from buying Virgin America four years ago, as their leases expire, Alaska Chief Executive Officer Brad Tilden said ahead of the Tuesday announcement. Before the Virgin America deal, the Seattle-based airline had a long history as an all-Boeing operator and corporate neighbor of the planemaker’s factories.
The Alaska order buttresses Boeing’s effort to sell the Max despite the worst aviation downturn on record and the longest grounding in U.S. history, as airlines press for discounts and prepare for an eventual travel rebound. With the deal, Boeing continued to boost sales of its workhorse single-aisle jets since U.S. officials cleared the Max to resume flying last month, including a 75-plane order by Ireland’s Ryanair Holdings Plc.
“There is a huge advantage to a simple, single fleet structure,” Tilden said Monday in a video interview, citing lower ownership costs from maintenance, training and other expenses.
‘White tails’
The carrier boosted its Max 9 order from a prior deal for 32 that it placed in 2012. The jets will carry 178 seats, the same as Alaska’s existing fleet of older 737-900 and 737-900ER aircraft.
Alaska’s order includes nine so-called “white tails”—the industry term for new jets without buyers—that Boeing will rework for the airline. The manufacturer is scouting new takers for about 100 of the 450 aircraft that it built but never delivered during the 20-month grounding. Aviation regulators grounded the Max in March 2019 following two crashes that killed 346 people.
The deal with Alaska also includes 13 of Boeing’s Max 9 jets that it will lease from Air Lease, under the terms of a transaction announced last month. Air Lease agreed to buy 10 A320 planes from Alaska.
Alaska will take 13 Max 9 aircraft next year, with the first delivery in January and commercial service starting two months later. Those planes will be followed by 30 in 2022, 13 in 2023 and and 12 in 2024. The company will shed its last Airbus jets by returning six in 2024 and the final three the following year, according to a regulatory filing.
The carrier will also have options for 52 additional Max aircraft, with rights for the larger and smaller versions.