Alaska Airlines To Place Big Airplane Order In 2020

Alaska Airlines faces a huge fleet decision this year, which is made complex even further by the provider’s longstanding commitment to Boeing.

Alaska Airlines to purchase new aircrafts in 2020

During Alaska Airlines’ 4th quarter 2019 profits call previously this week, the airline company revealed a major focus for 2020, which is fleet renewal.

Alaska Airlines has 61 Airplane A319 s and A320 s that they obtained through the Virgin America merger, and the strategy is to change these with more “efficient” (aka larger) planes.

Alaska plans to buy either 737 MAX aircraft (the -9 s or -10 s) or the Jet A321 neo This would provide the capability to produce more profits while reducing system expenses.

As Alaska’s SVP of Fleet, Financing, and Alliances describes the circumstance:

The economics of up determining over the next a number of years are engaging and we are anticipating settling plans to do this as one of our main 2020 objectives. The ultimate timing of a fleet shift will be stabilized to smooth incremental training expenses, particularly of relocating to a single fleet and will also be carried out in a manner that guarantees we can fulfill our free capital and capital return objectives.

Alaska’s present Airplane fleet

Historically Alaska has actually been an all Boeing airline. Heck, their Boeing aircrafts even have “Happily All Boeing” written below the cockpit windows, even though it hasn’t been precise for several years.

Alaska Airlines has over 160 Boeing 737 airplane, split in between the -700 s, -800 s, and -900 s. On top of that, the airline company has 30 Boeing 737 MAX 9 airplane on order, though for obvious factors the timeline for those has been pressed back.

Alaska’s Airbus fleet was obtained entirely through their takeover of Virgin America. Alaska has:

• 10 Airbus A319 s, which are approximately 12 years old
• 51 Plane A320 s, which are approximately nine years of ages
• 10 Jet A321 neos, which are an average of under 2 years old, and which the airline company does not intend on retiring anytime soon; after all, they’re considering buying more of these

Which aircraft makes one of the most sense for Alaska?

As I see it, there are a few major aspects at play here …

Alaska supporting their “hometown” business

Before Alaska acquired Virgin America, it was totally unimaginable that the airline company would ever purchase Jet airplanes. Alaska Airlines is based in Seattle, and has been fiercely faithful to Boeing.

Alaska 737 (with “Happily All Boeing” composed underneath cockpit windows

The double edged sword of fleet simplification

In the past the concept of fleet commonality was something airline companies strived for. An easy fleet is fantastic in regards to training expenses, maintenance, scheduling, and so on. If there’s one thing we’ve discovered from the airline market in the past couple of years, it’s that this is a double edged sword.

Take Norwegian as an example. They focused exclusively on the 787 -9 and 737 MAX 8– the 737 MAX 8 is grounded, and the 787 -9 has actually been having big problems with Rolls Royce engines.

Norwegian’s 737 MAX eights have triggered big headaches for the airline

Alaska will have Plane airplanes no matter what

It’s something if Alaska might benefit from operating just Boeing 737 aircraft with this change, though the reality is that no matter what, the airline is keeping at least 10 Airplane A321 neo airplane. For that reason there aren’t any real synergies to be had in ordering the 737 over the A321, considering that they’ll have both planes in their fleet regardless.

Virgin America had actually bought the A321 neos

My guess of what will occur

While there’s no denying that Boeing’s track record has taken a hit with the 737 MAX concerns, I still believe Alaska will select Boeing for their fleet renewal. Unless Airbus somehow uses them a much better deal, I seem like Boeing has the upper hand here.

For what it’s worth, it’s informing that the A321 neo is even seriously being considered. Back in 2017, Alaska Airlines’ CEO suggested that the airline company planned to be all Boeing long term, saying the following (in recommendation to Jet planes):

” If I were to guess, they won’t be in the fleet permanently. It will spend some time to get a shift done.”

Lastly, I do think it’s fascinating how Alaska is going to extremes with capacity. They certainly have their regional operation, where they run 76 seat airplanes. But it seems that all of their future fleet preparation involves ~200 seat airplanes, since they have lower system expenses. It doesn’t appear that Alaska is even think about an airplane like the Airplane A220

What aircraft do you believe Alaska will choose, and which do you wish to see them select?

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