Alaska signs deal for more 737 Maxes now that the plane is cleared to fly

©The Seattle Times

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SEATTLE — Days after the Federal Aviation Administration cleared Boeing’s 737 Max to fly passengers again, Alaska Airlines became the first carrier to expand its fleet of the aircraft.

Alaska announced Monday it will lease 13 Maxes from Los Angeles-based Air Lease Corp (ALC).

Alaska already has 32 Maxes on order directly from Boeing, five of which are expected to be flying by summer 2021. Alaska will begin flying the 737-9 Max in March.

Following so soon after the plane was ungrounded, the transaction indicates that airlines willing to take new jets in the middle of a historic aviation downturn can get excellent discounted deals.

ALC has 138 Maxes on order, one of the largest commitments to the plane among lessors. With airlines around the world having parked many of their aircraft because of low demand for air travel, all airplane leasing companies are scrambling to place their jets.

Alaska, like Southwest in the U.S. and Ryanair in Europe, is seeking to take advantage of the downturn to try to strengthen its position and even increase its market share as rivals contract.

In a Nov. 15 internal message to the airline’s pilots, Capt. John Ladner, Alaska’s vice president of flight operations, cited a maxim he described as “what successful companies do when the going gets tough.”

“Never let a good crisis go to waste,” Ladner said, quoting Harvard Business School, Professor Ranjay Gulati, a guest speaker at a recent Alaska leadership planning session.

Ladner reminded the pilots that after the 9/11 terrorist attacks in 2001, Alaska successfully expanded its East Coast routes. Then, during the 2008 global economic downturn, it expanded service to Hawaii.

“Alaska Airlines’ leadership has a proven track record of using challenging times to fortify our future,” Ladner told the pilots. “I’m looking forward to the moves we make to take advantage of this latest crisis.”

The ALC deal will eventually allow Alaska to shed some of the Airbus A320s it acquired with Virgin America in 2016 and replace them with Maxes. The Seattle-based airline had an all-Boeing fleet before the Virgin acquisition and has said recently it wants to retain only the longer-range A321neo Airbus jets.

Brad Tilden, Alaska Air Group chairman and CEO, said the deal is “an opportunity to sell 10 planes that are not in our long-term plans and replace them with 13 of the most efficient narrow-body aircraft available.”

Alaska will sell 10 Airbus A320s to ALC, and subsequently take delivery of the 13 new Boeing 737-9 Max from fourth quarter 2021 through 2022.

Alaska said it will lease the A320s back from Air Lease for a short time after the transaction closes.

After permanently parking all A319s and some A320s earlier this summer, this deal leaves Alaska Airlines with 39 A320s in the operating fleet along with 10 A321neos.

In a statement, ALC executive chairman Steve Udvar-Házy said the 737-9 Maxes will bolster Alaska’s fleet “just in time as we expect the airline industry will undergo a sustainable recovery starting in 2021.”

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©2020 The Seattle Times