Alaska Airlines advances Airbus A320 retirements, weighs post-pandemic fleet needs

Alaska Airlines is moving forward with plans to retire more Airbus A320s even as it ponders the shape of its future fleet amid uncertainty over the recovery from the coronavirus pandemic.

The Seattle-based carrier is keeping plans to retire seven of its 49 remaining A320s in 2021, under an updated fleet plan released Monday. In addition, Alaska will retire one Boeing 737-800 and hopes to take delivery of 15 737 MAX 8s next year.

The move comes as Alaska continues to weigh whether to keep the A320s as planned through around 2024, or accelerate their retirement due to the pandemic. On top of that, the crisis has added the question of whether or not to replace them with new jets to the equation.

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Alaska has retired 12 planes — its 10 A319s plus two A320s — so far in the crisis. And while the update fleet plan does not show more aircraft retirements this year, the airline noted in a footnote that: "It is probable that the current outlook as stated... will change significantly."

The fate of the classic A320 jets that Alaska inherited from Virgin America has been questioned since their merger in 2016. Alaska was an all 737 mainline operator for nearly a decade prior to the merger, something it touted by emblazoning the slogan "Proudly All Boeing" on the fuselage of its Boeing jets.

That's why many suspected Alaska would jump for more 737 MAXes when it announced a campaign to replace its 61 A319s and A320s at the beginning of the year. Officially, the carrier said it was considering either more A321neos — it inherited 10 from Virgin America that are not slated for replacement — or more 737 MAX 9s or 10s. Then came COVID-19 and the entire fleet review was ratcheted up to 11.

Related: Alaska Airlines is leaning towards an all-Boeing 737 fleet after the coronavirus

There are benefits and drawbacks to a varied airline fleet. A benefit is being able to serve cities with an ideally suited plane, both in size and capabilities. The drawback comes from the added cost of dedicated staff and maintenance for each airplane type.

This is a question every airline weighs, though not all come to the same conclusion. Delta Air Lines, for example, opted for efficiency over capabilities in its decision to retire its Boeing 777s in favor of Airbus A350s as it updated its fleet plan in response to the crisis. The A350s can do much, but not all, of what the 777s can do.

An added question for Alaska is the on-going investment in new cabins for its Airbus fleet. The carrier was in the later innings of its program to replace the unique Virgin America cabins with ones that matched the look-and-feel of its 737 jets. Alaska had updated more than 40 A319s and A320s at the beginning of the year — what is now essentially a sunk investment for the planes that have been and will be retired.

Related: US airlines may have to retire 1,000 jets after the coronavirus; these could end up in the boneyard.

"Like most airlines around the globe, Alaska is in the process of reshaping our fleet size to better match demand," Alaska senior vice president of fleet, finances and alliances Nat Pieper told TPG earlier in June. "We want to be flying our most efficient aircraft... For aircraft efficiency, we think of cost efficiency, customer efficiency and operational efficiency."

Pieper said the A319 retirements were not indicative of a return to an all-Boeing fleet. Rather, the jets were the "worst performing aircraft" in the Alaska fleet. On the other hand, he said they "love our A321neo fleet."

"As we resize our fleet... we will prioritize efficiency to determine which aircraft to operate," he said. "[It's] too soon to call whether that means single-fleet or dual-fleet for the long run."

Related: Alaska Airlines weighs Boeing or Airbus to replace Virgin America fleet

The 2021 fleet plan does not outline a long-term decision for Alaska. What it does do, to paraphrase Deutsche Bank analyst Michael Linenberg, is continue to make the fleet decision "in real time."

Alaska, like every airline, simply does not now how the recovery from the coronavirus will play out. While leisure travel is picking up this summer, many Wall Street analysts worry that airlines could once again face empty planes this fall if business travelers do not begin flying again in significant numbers soon. And the threat of further waves of COVID-19 infections remains real.

Alaska, in part capitalizing on the return of holidaygoers, plans to add a new route to Fresno (FAT) in September. The airport is the closest to Yosemite National Park.

Related: Airlines may face a tough fall after that summer uptick

In an interview with The Seattle Times earlier in June, Alaska president Ben Minicucci said the airline only plans to fly about half of what it flew in 2019 in August. On top that, Alaska will be 20% smaller in 2021 than it was last year with revenues down as much as 35%.

The carrier plans to fly about 30% of its 2019 schedule in June, and as much as 55% in July, according to Cirium schedules.

To support the schedule growth this summer, Alaska is bringing planes back to service. It has already returned 21 of 144 stored mainline jets, and 19 of 21 stored regional aircraft. The airline could could pull as many as five planes out of storage and return them to flying every week, it said.

Related: Here’s what it takes to get planes back in service after they’ve been in storage