Alaska Airlines calls Boeing a ‘fantastic partner’ as it decides between A321neo and 737 MAX

Mar 7, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Alaska Airlines is pushing forward with its search for an Airbus A320 family fleet replacement, even as it works to manage rapidly changing demand for air travel amid fears of the COVID-19 coronavirus.

The Seattle-based carrier is evaluating how to replace the 61 Airbus A319s and A320s it gained through its 2016 acquisition of Virgin America. On the table are either more Airbus A321neos — it operates 10 currently — or Boeing 737 MAX 9s or 10s.

At stake is whether Alaska returns to the “proudly all Boeing” moniker it boasted for over a decade, or continues with the diversified fleet it has flown since the merger.

Sign up for the free daily TPG newsletter for more airline news

“There’s extraordinary benefit to a single platform, Boeing is a fantastic partner, [and] there are reasons to not have a single platform,” Alaska CEO Brad Tilden said at the U.S. Chamber of Commerce Aviation Summit on Thursday. “I think we’ll answer that in the next four, five, six months.”

Tilden’s comments, while not making any commitments, did acknowledge the company’s history and local ties with Boeing. His immediate response to the question on the fleet campaign was to highlight Alaska’s “very, very special relationship” with Boeing, then he added that the planemaker makes an “incredible” product and that Alaska is “confident” in the beleaguered MAX.

In terms of Airbus, Tilden said Alaska “did inherit” the jets without embellishing.

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

While Tilden was clear that he would not answer the “Boeing or Airbus” question at the summit, some industry observers will undoubtedly try to read the tea leaves for a hint of what Alaska might be thinking.

Airline executives are known for using the media to push planemakers for better deals. This is what former Delta Air Lines CEO Richard Anderson did when the carrier was weighing either the Airbus A350 or Boeing 787 for its wide-body jet needs.

However, with an Alaska mainline fleet that is more than two-thirds 737s and with firm orders for 32 MAX 9 aircraft, the rationale for Alaska to opt for more Boeing jets is clear. The airline flew 71 A320 family to 166 737 family jets at the end of December, according to its latest fleet plan.

Alaska’s narrow-body jet campaign comes amid uncertainty around the impact of the COVID-19 outbreak. In an investor update Friday, the airline said it was seeing a “significant increase in close-in cancellations and a decline in forward bookings” since the beginning of March. The carrier has put flights on sale to encourage people to travel, and is considering further actions like capacity cuts.

Related: US airline execs warn coronavirus impact ‘could be worse than 9/11’ downturn

Most Wall Street analysts, at least at this point, expect the drop in demand related to COVID-19 to be relatively short-lived. This likely short-term impact, while undoubtedly severe, compares to a fleet decision that will impact Alaska into the 2030s — long after the impact of the virus is likely just a memory.

This is not to mention that a down market, when manufacturers are discounting to drum up sales, is often a good time to make a big ticket purchase.

Alaska will be flying its former Virgin America Airbus jets through at least 2025. The airline plans to open a pilot crew base for the fleet in Seattle to support additional A320 family flying from its homebase.

Related: Alaska Airlines to shift more Airbus flying to Seattle

Featured image by Edward Russell/TPG.

Chase Sapphire Preferred® Card

WELCOME OFFER: 60,000 Points

TPG'S BONUS VALUATION*: $1,200

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Intro APR on Purchases
N/A
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.