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

Nov 6, 2020

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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.

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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.

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