Alaska Airlines announced today it is exercising options to purchase 52 Boeing 737 MAX aircraft for delivery between 2024 and 2027—growing the airline’s confirmed 737 MAX fleet from 94 to 146. Alaska also secured rights for 105 more planes through 2030, ensuring access to sufficient aircraft for fleet replacement and growth. This agreement represents the largest commitment for future aircraft in the airline’s history.
Standardizing The Mainline Fleet
The mainline operations will return to being an all-Boeing fleet. This is the way it was prior to the acquisition of Virgin America taking on a fleet of Airbus A-319/320/321 aircraft as well as orders for the A321NEO.
This order positions Alaska’s fleet as one of the most efficient, environmentally friendly, and profitable fleets in the industry. The order includes 737-8, 737-9 and 737-10 aircraft, enabling Alaska to optimally match aircraft size and capability with market characteristics. They have full flexibility to shift between 737 MAX models as appropriate.
This order gives Alaska a line of sight to operate more than 250 737 MAX series aircraft by 2030. The flexibility built into the agreement allows Alaska to match our deliveries with economic conditions while saving our place in the production line.
“This investment secures aircraft to optimize our growth through the next decade, which we know will be a formidable competitive advantage,” said Alaska Airlines CEO Ben Minicucci. “We’re proud of the strong financial foundation that uniquely positions Alaska to make this commitment to our future, and of the fantastic partnership we share with our hometown aircraft manufacturer at Boeing.”
Already operating a fleet of 35 737-9 aircraft, they expect to accept delivery of another 43 MAX aircraft between now and the end of 2023—at which point we will once again operate a mainline fleet solely of Boeing aircraft. The performance of the 737-9 has exceeded expectations on economics and fuel efficiency, as well as guest satisfaction.
This order positions Alaska’s fleet as one of the most efficient, environmentally friendly, and profitable fleets in the industry. The order includes 737-8, 737-9 and 737-10 aircraft, enabling Alaska to optimally match aircraft size and capability with market characteristics. The airline has full flexibility to shift between 737 MAX models as appropriate.
Standardizing The Regional Fleet
The Alaska Air Group also operates an extensive regional network with their wholly owned subsidiary, Horizon Air. Horizon Air also through a capacity purchase contract with Sky West flying the E-175 regional jets.
Currently, Horizon Air flies two aircraft types, the Bombardier Q400 turboprop and the E-175 regional jet. This will change next year when Horizon Air retires the remaining Q400 aircraft and replace them with new E-175 regional jets.
Economies of Scale
A key metric in reducing airline operating costs is to standardize the aircraft fleet. This standardization pays back by:
- Certification of pilots on one aircraft type instead of many, reducing training and certification costs,
- Certification of flight attendants on one aircraft type instead of many, reducing training and certification costs,
- Certification of A & P mechanics on one aircraft type instead of many, reducing training and certification costs,
- Reducing the training costs of ramp agents and streamlining ramp operations.
This move by the Alaska Air Group will uniquely position itself along with Southwest Airlines in operating a common fleet type. Alaska Airlines will enjoy a significant reduction in aircraft operating costs as it approaches a common aircraft type.
Alaska Airlines formally had an all-Boeing mainline fleet to reduce operating costs and they will return to a single aircraft type fleet. Horizon Air is also standardizing its fleet type using the E-175 aircraft.
With the issues affecting Boeing, Alaska Airlines undoubtedly got the aircraft on this order at a substantial discount as they did on their previous 737MAX order.
For Horizon Air, the Q400 turboprop will be fully retired. This is an aircraft that will be missed by no one.