Huge: Allegiant Air Orders Up To 100 Boeing 737 MAXs

Huge: Allegiant Air Orders Up To 100 Boeing 737 MAXs

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Allegiant Air is making the switch from Airbus to Boeing, which most of us didn’t see coming.

Allegiant orders Boeing 737 MAX aircraft

It has today been announced that Allegiant has placed an order for up to 100 Boeing 737 MAX aircraft:

  • The airline is placing a firm order for 50 jets, and has options for 50 more jets
  • The airline will take delivery of 30 Boeing 737 MAX 7s and 20 Boeing 737 MAX 8-200s; the 737 MAX 8-200 was otherwise ordered by Ryanair
  • The airline will take delivery of 10 planes in 2023, 24 planes in 2024, and 16 planes in 2025
  • This order is worth roughly $5 billion at list prices
  • The 737 MAX will reduce fuel burn and carbon emissions by 20% compared to Allegiant’s current aircraft
  • The primary motivation here is to grow rather than replace existing planes, though some existing planes will also eventually be retired

Here’s how Allegiant Air CEO Maurice Gallagher describes this order:

“Our approach to fleet has always been opportunistic, and this exciting transaction with Boeing is no exception. While the heart of our strategy continues to center on previously-owned aircraft, the infusion of up to 100 direct-from-the-manufacturer 737s will bring numerous benefits for the future – including flexibility for capacity growth and aircraft retirements, significant environmental benefits, and modern configuration and cabin features our customers will appreciate.”

There are a few things that make this development most significant:

  • Allegiant currently operates an all-Airbus fleet, as the airline has 122 Airbus A319s and A320s
  • Allegiant has historically primarily bought planes secondhand; only 13 of those 122 planes were purchased directly from Airbus
  • This is Boeing’s first order from a US ultra low cost carrier, as Allegiant, Frontier, and Spirit, have all historically flown Airbus aircraft

This aircraft manufacturer “flip” is especially noteworthy, since Boeing recently lost two customers to Airbus:

It’s great for Boeing that the company managed to get the business of an Airbus customer. I’m not sure it’s great for passengers, though, since the A320 is a better plane than the 737 from a passenger comfort standpoint (then again, at Allegiant passenger comfort isn’t the priority).

Allegiant currently operates an all-Airbus fleet

Allegiant must have gotten an incredible deal

Allegiant Air must have gotten the deal of the century on these 737 MAX aircraft. Allegiant is an incredibly frugal ultra low cost carrier, so you have to consider that:

  • There are plenty of secondhand aircraft available right now at very low costs, and Allegiant could have picked those up rather than picking up new Boeing 737 MAXs
  • There are significant costs associated with going from an all A319/A320 fleet, to adding Boeing 737s, in terms of pilot training, maintenance, scheduling, etc.

You can’t understate enough the operational complexity of this for an airline like Allegiant, which takes an unconventional approach to aircraft scheduling. Allegiant has roughly two dozen crew bases from which it operates point-to-point flights. Scheduling these planes and retraining pilots will be no small task, as this is significantly more complex than at a legacy airline.

Will Allegiant simply transition certain bases from Airbus to Boeing, or will some bases have both aircraft types? Like I said above, all of this points to Allegiant having received an incredible deal on these planes. That’s basically confirmed directly by Allegiant’s CEO, who calls this order “opportunistic.”

The airline is trading lower lease and financing costs for lower operating costs. The 737 MAX also has the added benefit of having more range, potentially opening up some markets that A320-family aircraft couldn’t reach (like Hawaii).

Allegiant Air has ordered up to 100 Boeing 737 MAXs

Bottom line

Allegiant Air has placed an order for up to 100 Boeing 737 MAXs, with 50 firm orders and 50 options. The order will be split between 737 MAX 7s and 737 MAX 8-200s. This is a major development, both because it’s a huge win for Boeing (which has otherwise been lagging behind Airbus), and also because Allegiant is buying all new planes here (rather than picking up secondhand planes). The airline must have gotten a heck of a deal.

What do you make of Allegiant Air’s Boeing 737 MAX order?

Conversations (18)
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  1. dizzy Guest

    Super rando, but they actually announced this on a flight I was on Thanksgiving weekend. Actually thinking about getting their card- if things start to ease a little, they seem to be having more and more often the most useful/convenient/direct flights for me here in TTN/PHL area.

  2. Mark Guest

    Re A320 vs 737 - two advantages A320 have is cabin is wider - plus window is higher up - so seat is higher up - so more leg room (for same configuration) as your leg has more space. Boeing probably priced these aircraft below the price of a used A320 or A220 so any airline would be stupid to walk away from such a deal (& Boeing would pay for pilot training , etc.).

  3. dander Guest

    Interesting, they must have gotten a good deal. I do think the Quantas deal with airbus was a "we're sorry but we're buying American subs" bone.
    My Brother the former world traveler likes the airline

  4. Eskimo Guest

    Interesting to see why and how a LCC breaks the LCC model.

    If they are really transitioning away from the A320, it would have been a larger order.

    But the MAX8 200 really makes me think twice about flying Allegiant.

  5. Points Adventure Guest

    and/or the right person from company A slept with the right person from company B

  6. Wideboy101 Guest

    I can say one thing with certainty, the Max is without a doubt the quietest commercial airliner I have every flown on ( New York to Miami ) a couple months ago. The two hour flight was beyond quiet and smooth. Allegiant won’t regret this order. Haven’t flown the 787 yet, can’t believe it could be any quieter than a Max.

  7. Ghostrider5408 Guest

    Yes most likely the deal of the century no doubt. With respect to your comment regarding transaction costs, yes there will be however one most also look at the "burden" which most likely they have rates are at a extremely low point, as well as the slow down is allowing the purchase of supporting equipment also bought cheap.

    Good move for the US manufacturing / jobs I am not sure BA deserves the win given...

    Yes most likely the deal of the century no doubt. With respect to your comment regarding transaction costs, yes there will be however one most also look at the "burden" which most likely they have rates are at a extremely low point, as well as the slow down is allowing the purchase of supporting equipment also bought cheap.

    Good move for the US manufacturing / jobs I am not sure BA deserves the win given the operating fiasco's they have been through. I remember when I was in the AF we had issues all the time with them.

  8. Juan Guest

    Could see Allegiant also changing their operating model a bit. Currently their aircraft don't get utilized much since they are older and burn more fuel, but because they are cheap they don't need to operate them as much to make it profitable (similar to cargo airlines).

    My guess is we'll see Allegiant expand their network/frequency with these new aircraft and get more utilization out of them. Probably see more routes out of smaller airports with...

    Could see Allegiant also changing their operating model a bit. Currently their aircraft don't get utilized much since they are older and burn more fuel, but because they are cheap they don't need to operate them as much to make it profitable (similar to cargo airlines).

    My guess is we'll see Allegiant expand their network/frequency with these new aircraft and get more utilization out of them. Probably see more routes out of smaller airports with little to no competition.

    Also, while Airbus planes are wider, Allegiant kept their seat width around 17 inches (similar to 737s/757s). Flew with them last week for the first time, noticed the seats were narrow but the aisle was really wide because of it.

  9. Scott Guest

    Had my first Allegiant experience right before Christmas and it was perfectly fine. It was actually my first flight since Jan 2020. I was a decently heavy business traveler flying Delta mostly but Allegiant offered a nonstop AVL-LAS flight, and since it was my 2-year old son's first flight figured it was easiest to just do the nonstop. We paid an extra $5 per ticket for the extra legroom seats which had pretty decent legroom,...

    Had my first Allegiant experience right before Christmas and it was perfectly fine. It was actually my first flight since Jan 2020. I was a decently heavy business traveler flying Delta mostly but Allegiant offered a nonstop AVL-LAS flight, and since it was my 2-year old son's first flight figured it was easiest to just do the nonstop. We paid an extra $5 per ticket for the extra legroom seats which had pretty decent legroom, and since it was our small son in the middle seat between my wife and I we had plenty of room. We didn't fly them back as the return leg was a redeye so did Delta coming home (and the Allegiant extra legroom seats had more legroom than the standard seats we had on the Delta 767). But we had a 3-hour layover in Atlanta which is a longtime for a toddler. We will definitely fly Allegiant again, especially now that they have a nonstop out of AVL to VPS so I can go visit my mom on weekends at the beach without having to drive 8 hours.

  10. stogieguy7 Gold

    The key analysis that Lucky offered in this article is that Allegiant must have gotten the deal of the century. And I agree totally. Airbus has been eating Boeing's breakfast, lunch and dinner for quite some time now and they needed a win. In this case, Allegiant must have come sniffing around and Boeing is keenly aware of how "frugal" they are. So they must have offered one hell of a bargain.

    While this is...

    The key analysis that Lucky offered in this article is that Allegiant must have gotten the deal of the century. And I agree totally. Airbus has been eating Boeing's breakfast, lunch and dinner for quite some time now and they needed a win. In this case, Allegiant must have come sniffing around and Boeing is keenly aware of how "frugal" they are. So they must have offered one hell of a bargain.

    While this is interesting to analyze on many levels, would it make you fly Allegiant? Answering for myself, absolutely not. Can you imagine what hell it would be on one of their 737-8200's with 200+ seats crammed in there, on a 5 hour flight to Hawaii? I don't care how cheap it is, it gets a hard pass from me.

  11. ChuckMO New Member

    Availability may have played a factor as well. Some of their used Airbus aircraft will be coming up on D Checks in the near future. A costly endeavor for a ULCC.

  12. MG Guest

    I have to give it to them, 6 years ago many thought they were one more emergency landing from a catastrophic event that would essentially bankrupt the airline. They seemed to have righted their ship and fixed many issues to continue growth and improve safety.

  13. Evan Guest

    I've flown in both Boeing 737 series and Airbus 3420 series aircraft...can we get over this "superior comfort" stuff. They're both metal tubes. The airline really determines "comfort", not the aircraft manufacturer.

    1. Steve Diamond

      Agreed. Airline's configuration and seat is much more important than manufacturer. I would much rather have a better config and seat on a plane that is one or two inches less wide than another. Also i could care less about bathroom size considering i wont use a bathroom on anything under 4.5 hours and if i do i will be in and out of there in 25 seconds.

    2. stogieguy7 Gold

      For the most part, you are right. It is true, however, that the fuselage diameter of the A320 series is about 1-2 inches wider in the interior of the aircraft than the fuselage of the 737 series is. That said, this is not nearly as noticeable as when an airline crams in seats and offers a blood clot-inducing 28 inch pitch.

  14. Wes Guest

    This deal gives Allegiant access to the improved economics and range of the latest narrow body aircraft. We may see Allegiant open up new, longer routes with this plane. Perhaps a return to the Hawaiian market and some transcons.

    1. Steve Diamond

      Yup 50 firm orders and an option for 50 more. Nice versatility for either expansion or to replace older less efficient aircraft.

    2. KJ Guest

      Just like to add that this change of fleet is not new to Allegiant,after all they used to fly the MD-80 family of aircraft before they switched to Airbus.

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Steve Diamond

Agreed. Airline's configuration and seat is much more important than manufacturer. I would much rather have a better config and seat on a plane that is one or two inches less wide than another. Also i could care less about bathroom size considering i wont use a bathroom on anything under 4.5 hours and if i do i will be in and out of there in 25 seconds.

2
stogieguy7 Gold

The key analysis that Lucky offered in this article is that Allegiant must have gotten the deal of the century. And I agree totally. Airbus has been eating Boeing's breakfast, lunch and dinner for quite some time now and they needed a win. In this case, Allegiant must have come sniffing around and Boeing is keenly aware of how "frugal" they are. So they must have offered one hell of a bargain. While this is interesting to analyze on many levels, would it make you fly Allegiant? Answering for myself, absolutely not. Can you imagine what hell it would be on one of their 737-8200's with 200+ seats crammed in there, on a 5 hour flight to Hawaii? I don't care how cheap it is, it gets a hard pass from me.

1
ChuckMO New Member

Availability may have played a factor as well. Some of their used Airbus aircraft will be coming up on D Checks in the near future. A costly endeavor for a ULCC.

1
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