Alaska accelerates fleet renewal by converting 12 MAX options

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August 17, 2021
Alaska
Photo: Alaska Airlines

The prospect of rising travel demand has prompted Alaska Airlines to accelerate its fleet growth and exercise options for 12 737-9 aircraft ahead of schedule.

The decision by the Seattle-based airline to exercise the MAX options means the aircraft are now firm commitments for 2023 and 2024, bringing Alaska’s total firm 737-9 order to 93 aircraft.

Five of those aircraft are currently in service, with seven more to be delivered this year.  The revised plan means the oneworld member is now due to take 31 aircraft in 2022, 32 in 2023 and 18 in 2024.

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The December 2020 agreement saw Alaska agree to take 68 737-9s with options on 52 to be delivered between 2023 and 2026.

Including 13 exercised in May, the airline has exercised 25 of those options and says it will add 25 options to backfill the ones that have been exercised.

“We are excited to accelerate Alaska’s growth, building on our solid financial foundation that enabled us to weather the pandemic,” said Alaska Airlines senior vice president fleet, finance and alliances Nat Pieper.

“These aircraft are a prudent, long-term investment in our business that we can make while simultaneously maintaining our strong balance sheet.”

The decision comes after Alaska produced a strong second-quarter earnings recovery that exceeded analysts’ expectations.

Compared to its first quarter, revenue almost doubled to $US1.53 billion as its adjusted net loss shrank to $US38 million from a hefty Q1 loss of $US436 million.

When government grants were included, Alaska reported a second-quarter GAAP profit of $US397m.

The airline is also happy with the performance of the MAX planes it has already taken.

“We began flying our first 737-9s this past spring, and we’re extremely pleased with the operational, financial and environmental performance of the aircraft,’’ Pieper said.

“The planes are exceeding our expectations – from how quiet the engines run to the greater range they provide – and our guests love them.”

Alaska’s 737-9s are configured to carry 178 guests with 16 first-class seats and 24 premium class seats providing the most premium legroom of any US airline.