Betting big on a recovery in air travel and on the Boeing 737 MAX as the jet for its future, Alaska Airlines on Monday announced a firm order for a dozen more MAXs — its third order for the airplane since the Federal Aviation Administration ungrounded the jet in November.
“These aircraft are a prudent, long-term investment in our business,” said Nat Pieper, Alaska Airlines senior vice president in charge of fleet planning. “We are excited to accelerate Alaska’s growth.”
In December, Alaska ordered 23 Boeing MAXs to add to the 45 it already had on order, with purchase options to buy an additional 52 MAXs on good financial terms later.
In May, it exercised options to add 13 more MAXs while also buying 17 Embraer E175 regional jets as it anticipated an easing of the pandemic and a summer surge in air travel.
With Monday’s additional order, Alaska’s total MAX order is now 93 jets, of which five are already in service, with seven more coming later this year. It has also added options to replace the 25 exercised so far this year.
Following the dozen MAXs entering the fleet this year, the plan is to take delivery of 31 next year, 32 in 2023 and 18 in 2024. These will replace all of the Airbus A320s inherited from the 2016 acquisition of Virgin America as well as some older Boeing 737s.
Alaska won’t have to lay out any cash for these airplanes until next year. Payments for this year’s MAX deliveries are already covered by predelivery deposits that Alaska gave Boeing for pending orders before the MAX was grounded in March 2019 — following the deaths of 346 people in two fatal crashes in Indonesia and Ethiopia.
Boeing subsequently restructured the terms of Alaska’s prior order for the MAX with discounts to compensate the airline and encourage the follow-on orders.