Alaska Air Reports Losses and Buys 737 MAX Aircraft!

By Spyros Georgilidakis | October 25, 2020

The airline has had as bad a time as everyone else in the last few months, but is looking at the future. Preferably with an all-Boeing fleet. That’s if they go ahead with a new order for Boeing 737 MAX aircraft, to replace their inherited A320 family of jets.

It’s inescapable. Successful or not, all airlines are reporting losses in their newest financial reports — which surprises nobody. But many of them are already looking past the crisis and are planning ahead. Some are pushing for new technologies that will be useful after the epidemic, others are refreshing idle aircraft… and now Alaska Airlines joins others in buying new ones.


Homogenizing the fleet

The story was first reported a few weeks ago, in the wake of the FAA 737 MAX test flight. Since then the airline has announced financial losses, but its executives have provided more details on its plans. And it’s hard to argue against the logic: the airline has inherited a fleet of Airbus A319, A320 and A321 aircraft, from their acquisition of Virgin America four years ago. With the bulk of its fleet consisting of Boeing aircraft, and the Airbus fleet on a lease, the company would like to replace the latter with leased 737 MAX aircraft, and take it from there.

Alaska Air Reports Losses and Buys more MAX Aircraft!

We are better positioned than any other airline to survive this storm”, Alaska Air CEO Brad Tilden said. The airline already has firm orders for 32 737 MAX-9 aircraft and options for 37 more. The Airbus fleet they inherited numbers 71 planes and in the pandemic, they are all parked. “We love all of our airplanes. But the A319s and A320s are uneconomic relative to others”, said Nat Pieper, senior vice president of Alaska’s fleet. “It’s a logical time as we are resizing out fleet, getting it to best match demand, to really figure out how do we get the best economic aircraft on the field”.



Of course all of the above depends greatly on the timing of the return of the Boeing 737 MAX to service. Boeing is eager to get the ball rolling on more MAX orders. So, the airline is likely to get a good deal on any new purchase. And with the deal being based on a lease, their should minimize the negative effects of this purchase on their cash flow.

Alaska Airlines are still blocking the middle seat in their aircraft. They are hoping to stop this practice from 2021. Like their competitors, they continue to lose cash and this is expected to continue for many months to come. But they have some advantages: they don’t rely on international travel as much as other US airlines. A homogeneous fleet means they can recover quickly from furloughs, while other airlines would need to retrain pilots to different types.

It will certainly be interesting to see how airlines dealing with both the pandemic and the disruption of the 737 MAX saga, will handle themselves in the upcoming months. We can expect more movement when more information becomes available, about the timing of the aircraft’s return to service.



Photo by Avel Chuklanov on Unsplash

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