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

March 07, 2020
4 min read
Alaska Airlines calls Boeing a 'fantastic partner' as it decides between A321neo and 737 MAX
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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.

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“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.

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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 An Alaska Airlines A320 at Washington Dulles International Airport. (Image by Edward Russell/TPG)

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TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
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10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
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Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

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  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023