Alaska Airlines retires 8 more A320s, faces ‘onerous leases’ on other Airbus jets

Nov 6, 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.

Like drips from a leaky faucet, Airbus A320s are slowly disappearing from the Alaska Airlines fleet.

The Seattle-based carrier retired another eight A320s during the three months ending Sept. 30, according to a securities filing late on Thursday. The move leaves Alaska with just 41 A320s after having retired two of the model plus all 10 of its Airbus A319s earlier this year.

The retirements are the latest in Alaska’s steady march back to being a mostly Boeing 737 operator. The airline began evaluating a replacement for its 61 A319s and A320s prior to the coronavirus pandemic. However, the crisis has accelerated the process with Boeing emerging as the favorite — perhaps unsurprisingly given Alaska’s history as a Boeing operator.

Want more airline-specific news? Sign up for TPG’s free new biweekly Aviation newsletter!

Alaska continues to slowly recover from the crisis. The airline will fly nearly two-thirds of its pre-crisis schedule, or about 760 daily flights, said CEO Brad Tilden in October. This is up from a low of just 350 daily flights.

The recovery comes as the number of flyers remains well below normal levels. The latest data from trade group Airlines for America (A4A) shows U.S. passenger volumes were down 60% compared to a year ago during the week ending Nov. 3.

A full recovery is not expected for several years. A4A chief economist John Heimlich estimates that it will take air travel five years — or until 2025 — to return to 2019 levels.

Related: Airlines expect a post-coronavirus boom in leisure travel, they just don’t know when

The crisis has accelerated fleet changes at all airlines. American Airlines and Delta Air Lines have retired four types each: Airbus A330s, Boeing 757s and 767s, and Embraer E190s at the former, and Boeing 737-700s and 777s, and McDonnell Douglas MD-88s and MD-90s at the latter.

In June, Cowen analyst Helane Becker forecast roughly 1,000 aircraft retirements at U.S. airlines. This included around 43 jets at Alaska.

Alaska is hamstrung by leases on 40 of its A320s. Even if it wanted to get rid of the jets today, it would have to continue to make payments on the jets until either the leases expire or it reached a deal with the leasing company. The latter is tough proposition for lessors as few airlines are looking for additional Airbus jets in the middle of the pandemic.

Related: Why Alaska Airlines can’t retire its Airbus A320s all at once

For its part, Alaska is working to renegotiate “pretty onerous leases” on the A320s and “get into better aircraft or much better leases,” said the airline’s finance chief Shane Tackett in October. The airline already plans to return seven A320s to lessors as scheduled in 2021 and it has identified two more planes for early retirement without a specific date.

The carrier’s 10 A321neos are not slated for early retirement.

Alaska has orders for 37 737 MAXes. Deliveries could begin by the end of the year depending on when U.S. authorities re-certify the jet. Reports suggest that the airline is preparing to order additional MAXes once the grounding ends.

Related: The Boeing 737 MAX is about ready to return to US skies. Will it make it for the holidays?

Featured image by AaronP/Bauer-Griffin/GC Images.

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points


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 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
  • Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 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, 80,000 points are worth $1,000 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
  • Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.
Regular APR
15.99%-22.99% Variable
Annual Fee
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit

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.