Alaska Airlines To Place Big Aircraft Order In 2020

Filed Under: Alaska

Alaska Airlines faces a big fleet decision this year, which is complicated even further by the carrier’s longstanding loyalty to Boeing.

Alaska Airlines to order new planes in 2020

During Alaska Airlines’ fourth quarter 2019 earnings call earlier this week, the airline revealed a major focus for 2020, which is fleet renewal.

Alaska Airlines has 61 Airbus A319s and A320s that they acquired through the Virgin America merger, and the plan is to replace these with more “efficient” (aka larger) planes.

Alaska plans to order either 737 MAX aircraft (the -9s or -10s) or the Airbus A321neo. This would give them the ability to generate more revenue while lowering unit costs.

As Alaska’s SVP of Fleet, Finance, and Alliances describes the situation:

The economics of up gauging over the next several years are compelling and we are looking forward to finalizing plans to do this as one of our main 2020 objectives. The ultimate timing of a fleet transition will be balanced to smooth incremental training costs, especially of moving to a single fleet and will also be done in a manner that ensures we can meet our free cash flow and capital return goals.

Alaska’s current Airbus fleet

Historically Alaska has been an all Boeing airline. Heck, their Boeing planes even have “Proudly All Boeing” written underneath the cockpit windows, even though it hasn’t been accurate for years.

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

Alaska’s Airbus fleet was acquired completely through their takeover of Virgin America. Alaska has:

  • 10 Airbus A319s, which are an average of 12 years old
  • 51 Airbus A320s, which are an average of nine years old
  • 10 Airbus A321neos, which are an average of under two years old, and which the airline doesn’t plan on retiring anytime soon; after all, they’re considering ordering more of these

Which plane makes the most sense for Alaska?

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

Alaska supporting their “hometown” business

Before Alaska acquired Virgin America, it was completely unthinkable that the airline would ever order Airbus planes. Alaska Airlines is based in Seattle, and has been fiercely loyal to Boeing. Heck, there’s something about Seattle’s culture in general that’s all about supporting local businesses, and I’d say this is an extension of that.

Alaska 737 (with “Proudly All Boeing” written underneath cockpit windows

The double edged sword of fleet simplification

In the past the concept of fleet commonality was something airlines strived for. A simple fleet is great in terms of training costs, maintenance, scheduling, etc. However, if there’s one thing we’ve learned from the airline industry 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 been having huge issues with Rolls Royce engines.

Norwegian’s 737 MAX 8s have caused huge headaches for the airline

Alaska will have Airbus planes no matter what

It’s one thing if Alaska could benefit from operating just Boeing 737 aircraft with this adjustment, though the reality is that no matter what, the airline is keeping at least 10 Airbus A321neo aircraft. Therefore there aren’t any real synergies to be had in ordering the 737 over the A321, since they’ll have both planes in their fleet regardless.

Virgin America had ordered the A321neos

My guess of what will happen

While there’s no denying that Boeing’s reputation has taken a hit with the 737 MAX issues, I still suspect Alaska will choose Boeing for their fleet renewal. Unless Airbus somehow offers them a much better deal, I feel like Boeing has the upper hand here.

For what it’s worth, it’s telling that the A321neo is even seriously being considered. Back in 2017, Alaska Airlines’ CEO indicated that the airline planned to be all Boeing long term, saying the following (in reference to Airbus planes):

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

Lastly, I do think it’s interesting how Alaska is going to extremes with capacity. They obviously have their regional operation, where they operate 76 seat planes. But it seems that all of their future fleet planning involves ~200 seat planes, since they have lower unit costs. It doesn’t appear that Alaska is even consider a plane like the Airbus A220.

What plane do you think Alaska will choose, and which do you want to see them choose?

Comments
  1. It’s quite telling that some people think the MAX is going to come back into service anytime soon… I’m not flying one. They need to order some planes which are actually designed for flying.

  2. It’s a great year to be negotiating a large plane order with Boeing. I’d imagine that Airbus cannot or will not compete with the pricing offered by Boeing for this order. Alaska could go all Boeing and sell the 321neos, which is Boeing may help facilitate the sale of in some way in exchange for a MAX order.

  3. Boeing might offer an extremely cheap price for the MAX to gain momentum, but Airbus might counter that. The only problem I see with Airbus is production slot availability.

  4. I would imagine a split order over time. I see this as a growing trend in the industry so as to avoid too much reliance on one aircraft.

    I predict 40-50 A321NEO’s initally (with options for more) to be used primarily at California bases to expand capacity to the east coast and Hawaii.

    737MAX is a tough one. I imagine they announce the Airbus orders first to address capacity and wait out the MAX for now to see how things evolve over the coming year (including how the public responds to flying them). As well it puts them in a better negotiating position with Boeing down the road. Their Boeing fleet is still relatively young and new 737’s are not critical.

    I hate it as a flyer but Delta serves a strong example of how an airline can very well milk out aging aircraft for decades and still post huge profits and healthy growth. Airline CEO’s love ordering shiny new metal, but other than for growth in capacity and routes it’s really not necessary for direct replacement until you hit that 30 year mark (as proven by Delta).

    Finally, Ordering Airbus for now and waiting on Boeing will make the eventual merger with Jet Blue (we all know it’s coming) a bit easier.

  5. My guess: They’ll place an order with Airbus and squeeze a couple of 737Max at heavily discounted prices out of Boeing. A massive win for Airbus would of course be selling Alaska Airbus 320s and A220s (to replace E-Jets).

  6. I understand the hometown appeal but what are the real plus’ and minus’ of each plane from an operations standpoint? Fuel economy, capacity, reliability, purchase price, operation costs? How much of a hassle is it to have mixed fleets anyway?

  7. Delta has said the plane they fly with the highest net promotor scores is the A321. The risk to Alaska is that staying with Boeing may make their fleet less desirable from a customer standpoint than their main competitor at SEA especially if Delta loads it with A321 and A220 aircraft.

    My guess…a split order.

  8. They should go with the 220-300. One of the most comfortable planes and will help them to expand to long and thin routes.

    It would be very risky to stay all with Boeing.

  9. @memento its a fairly significant hassle in terms of positioning qualified maintenance people spares, reserves, etc etc. In general 737’s do better on flights less than two hours with airbus’s larger engine making up for the heavier weight after that point

  10. As a million miler on AS and long time flyer I think they will stick with BA for their main fleet adding smaller regional jets within the Horizon fold. Those like “Alex” will as “Syd” commented will be on a Max coming back soon. Frankly when BA fired it’s CEO that began clearing the way for certification. We should all remember there was an issue years ago with the 737.

  11. @Sunny leveson-jones
    Not really, basically all European mainline airlines are exclusively flying A320s even though the average stage length in Europe is much less than in the US.
    The only advantages of the 737 are a) availability (Airbus has basically sold-out all production slots for the A320) and b) less training costs for existing 737 operators.

  12. @Markj

    You do know that NPS isn’t static.
    Just because DL has a better A320 than 737 doesn’t mean people will feel that same with AS (although VA did a great job with it’s A320)
    From my experience, NPS is just a metric to please executives but have too many holes to fully rely on it.
    Think of 737 pre and post crash. Same plane but definitely a huge drop in NPS.

    I think all their Airbus are leases.
    My take is AS will get rid of the Airbus fleet at the end of their lease. Maybe DL will scoop it for rock bottom price maybe it will go to some Chinese airline. I think Boeing will get a huge order in return with a huge discount. This is AS way of confidence vote in hometown business and taking advantage of the 737MAX saga.

    They are stuck with the A321 for now, but with the introduction of the XLR and good performance maybe AS might get a sub fleet operating transcon or South America routes (still forget Asia or EU).

  13. I don’t believe they’ll buy any new Airbus for AS. Their hometown boosterism is too strong.

    “Proudly mostly Boeing” doesn’t quite have the same ring to it.

  14. They should stick with Boeing. The company isn’t going away and the MAX is here to stay. To those who say I’m not flying this aircraft, please don’t embarrass yourself. Cheapest ticket wins the game. Take a look at the JFK-LHR Y fares for one minute. AA is the worst airline to travel with however it is full. Why? Cheapest around. Nevermind the delays, the maintenance issues, the (sometimes) unfriendly staff. Cheap wins. And the deals Boeing is going to offer are going to be ridiculous. I guess we’ll see but my money is on the MAX being around for a long time.

  15. Chicago is now Boeing’s hometown, and less than half of Boeing’s employees are in Washington (although that state has far more than any other). Alaska’s obligation is to its shareholders, not to its friends at Starbucks. The only drawback to Airbus is that they have such a backlog from others that don’t want to buy Boeing, that their willingness to cut a deal may be diminished.

  16. If they were smart, they’d position themselves as preferring 80-90% Boeing and maybe 10-20% A321neo for premium transcon routes.

    Practically, keeping one toe in the pool might help them in the unlikely event of a complete Boeing implosion. It might also have the benefit of spooking Boeing into giving away the house in order to keep them ‘proudly all Boeing’.

  17. And if you think Boeing’s hometown has moved to Chicago, you don’t know anything outside of what’s in Boeing’s annual report. It has two hearts: one in Seattle and one in DC.

    I wouldn’t at all be surprised to hear they’re dismantling the Chicago headquarters as part of their course correction.

  18. A _lot_ of people are saying that Boeing lost its way following the McDonnell Douglas merger and moving the HQ out of Seattle, and part of the way to course correct and signal that course correction would be to move back.

  19. I’m picturing an Amazon-style dual HQ situation with major centers for commercial in Seattle/Renton and for military in DC/Arlington. The idea you need a HQ in single city is pretty archaic.

    It might not be anything as grand as “we’re shuttering Chicago” but they’ll likely slowly wind it down until people don’t notice it leaving Chicago.

  20. Here’s a few facts. The 737 (any long range version) cannot take off from DCA and fly to Seattle without bumping passengers off. The AB321neo has no problem and a has a few more seats; so AK is not going all Boeing. As for future AB deliveries, if AK so chooses to take the Virgin America options, AK is already higher up on the delivery list.

    Probably a mix order coming.

  21. @Michael Bell

    Get your facts straight before throwing in a few facts. Now I know you have good intentions, but what you preach is just not it.

    AK has an all Airbus fleet and doesn’t fly to the USA.

    There is no long range 737 except the BBJ.

    You are right that the A321 has an engine advantage due to 737 low design.

    What you’re missing is DCA-SEA is a premium heavy route but “AS” has only 8 F on it’s A321, not premium friendly at all. This includes all other transcon the 321 is flying. Hard to compete with other lieflat seats.

  22. @LHRcat I agree with you. It’s always hilarious when I hear people say, “I won’t fly/buy/rent ___.” I call it “tough talk.” If there’s a ticket for $334 and another one for $333, they will go for the $1 difference. As soon as the price is right, people have to eat the s*&^ they talked. Plus, the average person won’t know if their flying a 737 MAX or a cruise ship. And even if they find out after the fact or there’s a last minute equipment swap, what are they going to do, cancel the non-refundable ticket and buy another one? Gimme a break. The fact of the matter is that airlines own our a$$e$, and there’s nothing we can really do about it.

  23. 75K here and I vastly prefer the A321 on the SEA-DCA route to the previous 737-900. Huge improvement in passenger comfort. I hope they don’t revert back to “all Boeing”.

  24. Alaska announced it will order 200 aircraft. 100 to replace and update the fleet and 100 for growth. The NEO has proven to be a very comfortable plane for them. They’ve been able to increase capacity on their DCA routes from the 737-800 series, and the NEO’s range and fuel efficiency is indeed superior to the MAX aircraft. It’s hard to tell which way they will sway.

  25. Sitting here 5 miles from the MAX factory and having read & listed to what/how the MAX was constructed, I can’t imagine them fixing it – it is a flawed combination (engine to body).
    I absolutely will look at what plane is on the price quote.

  26. @ghostrider5408

    LOL, does your million mile status give you any actual insight into this topic that you felt compelled to mention it?

  27. The Boeing 737 Max has a weight and balance problem. The engines are too far forward and heavier than the previous engines on the 737 series. That makes the aircraft nose heavy and that is why the MCAS computer control was necessary in the first place. The MCAS system will be improved but they will still be doing the wrong thing righter and righter and it will still be G D wrong. The aircraft simply don’t fly the way that an aircraft should.

  28. A different kind of airline (of which there are many) would welcome this as THE opportunity to play the field. All intelligent carriers (blanket statement, yes, bite me) know not to over-rationalize, to not just pitch A/B against each other come RFP time, but to actually operate some of each.

    After 20 years of AVGeek-dom, I find fleet commonality a very fishy excuse of a concept, too many fleet planning mistakes having been made in its name. In fact, many/most airline cost structure concepts floating out here are very fishy. Airline cost factors are complex. And with quality issues on the rise, a singular fleet is not a gamble any airline can afford. (Or perhaps, like the case of Southwest, you become an accomplice to Boeing’s crimes.)

    Blaming the customer for choosing $333 over $334 is very fishy too, because hey, you try and demonstrate how much moral integrity that extra dollar buys. Usually one airline is a kettle and the other is a pot… Don’t let businesses blame the customer or investor for anything beyond manners, please. The integrity buck stops with those running, executing the business. If your cost structure can’t comfortably, reasonably offer something, don’t. Otherwise it’s lying and cheating and co-opting us as accomplice without our consent.

    There’s been this trend of businesses blaming the customer for the eventual penny-pinching decisions they undertake, and they try to find ways to persuade us that the power lay in the anonymous public. That’s one of the biggest lies of the modern world.
    But I digress 😉

    I’m biased against Alaska. So I predict they’ll just try to squeeze Boeing for a bunch of Maxes at impossibly low prices. Support hometown business my a**. 🙂

  29. If I was Alaska management I’d go with all Airbus because what IF another MAX goes down? I’ll avoid ALL 737 planes! Management would be smart to go with Airbus!

  30. In years to come, I am confident the 737MAX will be the best plane to ever have flown. I had the pleasure of flying on one before the grounding. I am confident Boeing will make a great comeback and Alaska will have some great buying power.

  31. @David
    This is where most people got it wrong. “it is a flawed combination (engine to body).” Yep it lost public trust and have a “faulty software” it is very far from flawed it is designed to fly under those known constraints. Boeing did go a bit too far recycling a regional 737-100 into an almost intercontinental MAX half a century later.

    Do you think a heavier than air metal tube with a highly flammable liquid a good combination to keep people in the air? Should it fall under you flawed combination logic.
    Maybe you should start walking 2000 miles.

    @stratifier

    LOL totally agree when you can double dip some publicity stunt, Support hometown business my a**.

    Now I think your blanket is true but not for your reasons. You can bluff on RPF a few times before they know you are exclusive to a manufacturer. Flying both is just to keep your poker face. But having huge orders also does the trick too.

    Now fleet commonality does save a lot in overheads. Think of a car dealership selling every make and model. Training and maintenance will be all over the place. And the WN has just shown having different gen aircraft does reduce the risk of your so called gamble. Otherwise we would have seen WN or FR cease operations.

  32. The 737 max plane does fly. American pilots flying them new exactly what to do when there was a issue related to the two planes that crashed. The issue is solved and it will be certified again. We need to be buying our planes in America to keep our people working not the frenchies

  33. Usual incorrect facts. In Seattle, Boeing has not been a “local business” since they moved the headquarters to Chicago.

    And Seattle won’t be Alaska’s “hometown airline” until they change the name to Seattle Airlines.

  34. I have flown globally, frequently, on many airlines and aircraft. I am not a nervous traveler. However the Max gives me pause. The forward placement of larger engines on the same airframe changes the center of gravity causing a tendency to pitch up. As I understand the latter is the reason for the software to push the nose down. This appears to me a challenge to the airworthiness of the Max.

  35. @Commenting Commenter “the average person won’t know if their flying a 737 MAX or a cruise ship” I’m laughed so hard with this. We are in complete agreement.

    @stratifier You do have many good points. And I agree that “most airline cost structure concepts floating out here are very fishy”. However, on the $333 over $334 issue. It’s not a blame game. Businesses don’t blame the passenger for choosing the cheaper option. They just identify the trend and try to follow it. It is just the reality of today’s market. Corporate responsibility and investor stewardship are concepts that fit the economy-booming days of yore…

  36. They will likely order Boeing 737’s. Remember, the MAX 10 is not banned like its siblings as it’s the newest version with a new separate certification, and it’s the biggest and most capable 737MAX. So, I think they will order a bunch of the MAX 10.

  37. I hope Alaska goes with Airbus. I have absolutely NO confidence in Boeing anymore. I live in Washington state too.

  38. It wasn’t that long ago that Alaska was proudly all McDonnell Douglas. The ties to Boeing are fairly recent.

  39. Alaska could get the 737 MAX for a bargain price, Boeing is desperate.
    The fact it now requires sim training removes a major advantage it had.
    Everytime a 737 MAX has a blown tyre, engine shut down the media will be over it like a rash.
    The A320/A321 are great planes and as a family they offer far more flexibility than Boeing can offer especially if longer new routes are the aim.
    If they wanted more commonality add the A220 -300 and dump the Embraers. Passengers love it and Delta is doing great with it.

  40. frequent flyer 75k nearly 1mil seattle based for whatever it’s worth

    home town – no way to avoid this issue as it will be in the public discussion regardless. and boeing still is home town, plenty of boeing workers and boeing reliant here.

    love the recently refurbished airbus now sporting AS inside and out. I will look for that aircraft and see if I can make my schedule make that flight. easily the most comfortable plane AS flies in each class of service. wish it went to bos.

    AS needs bigger planes on sea-lax it seems to me. I like the MAX 10 idea a lot, it also leverages hometown and innovation to sell a story of leadership and success. my bet is here.

    however, I also think more 321 are en route given the success they are having and that you can probably care for 2-3x that many aircraft without much more physical area and equipment. they will likely leverage that spend and keep diversity in the fleet.

    i don’t hear people talking about aircraft size and airport slots. at some point there just have to be bigger planes flying sea-lax and sea-sfo as there isn’t room for more flights. any chance of something even larger? would 787 or a350 make any sense at all? aren’t some airlines running these on shorter and domestic routes?

  41. @bill bellevue- how great would it be to see AS surprise us all with a widebody order (787-8) and then see them deployed on Hawaiian or transcon routes? Too bad it will never happen. I love using my companion fare to fly AS to Hawaii but 6+ hours on a single-aisle plane with a cart in the aisle much of the flight sucks.

  42. seatback screens are out of date 3 years after install. worthless. i’ll bring my own, save your money and weight and improve service.

  43. With the positive bias towards Boeing, and that fact that Boeing is desperate for some good news on the Max front (*cough* huge discounts *cough*), can’t see this going any other.

    Airbus know that for Boeing to lose this ‘proudly All Boeing’ airline would be a very large nail in the coffin, so expect them to also put in a huge discount on it. They either hammer a nail in the Max coffin or give Boeing a Pyhrric Victory.

  44. I have no qualms about flying a US aircraft operator 737-Max. Properly trained crews that aren’t near-entirely dependent and subordinate to aircraft automation could overcome the previous challenges caused by the MCAS. And now that the aircraft has been subjected to the most intense scrutiny of any model design series aircraft in history, I’ll be glad to hop on one. The big issue for Boeing is going to be overcoming what it widely believed to be a less-than-ideal culture shift. They may have to offer some substantial discounts to get sales going again, but that will be more attributable to irrational concerns with the aircraft type.

  45. I wish they would add some larger planes for their longer and trans Pacific flights to Hawaii.

    I prefer they stay Seattle local Boeing. As the old MD leftover mgmt from the buyout get terminated for screwing up the Max, Boeing will get better.

    The Max is a nice plane. They just have to get the compromised crap fixed.

  46. SeaFlyGuy!!!

    Just what I thought. The 787 series would bring the level of passenger service up hugely!!!

    The Transcon and Hawaii would be PERFECT routes. First would really mean something.

    The 787 would open new routes too!!!

  47. The longer the Max grounding goes on, the less confidence the public will have. Imagine the havoc this has caused and now a decision has to be made about fleet expansion. So you are a small business owner and you buy 5 vans and then you are told that those vans are not safe and you can’t legally drive them, you are stuck meeting your needs with the other vans you have, a year goes by no change, the vans are in your lot collecting dust, you get your Trump tax cut and the economy is booming and you have some extra cash, you really think you will buy more of the same or perhaps you’ll go with the vans that are still in the road. Besides in this case the 321 is just that much wider and more comfortable and therefore a great addition to the fleet for longer flights

Leave a Reply

Your email address will not be published. Required fields are marked *