Allegiant used to love flying used planes; now it's betting big on new jets

Allegiant Air and Boeing announced Wednesday that the low-cost carrier will purchase 50 new 737 MAX aircraft from the U.S. planemaker, with options for up to 50 more.

The order consists of two variants of the MAX jet — the smaller but high-performance 737 MAX 7, which is awaiting final certification by the FAA, and the 737 MAX 8-200, a densely configured single-cabin version of the 737 MAX 8.

The surprise order, Allegiant's first from Boeing, represents a departure from two strategies that have defined the airline so far.

Previously, Allegiant has generally sought out second-hand aircraft, with opportunistic purchases that have helped the airline expand its fleet and become a low-cost powerhouse.

Additionally, the purchase will add a layer of complexity to Allegiant's fleet — the airline previously opted to stick with a single-type fleet since retiring the last of its used MD-80 aircraft in 2018 (the airline had previously retired several second-hand Boeing 757s). It began exclusively using the Airbus A320 family of aircraft that year, including some A319s. The airline currently has 34 A319s and 77 A320s in service, according to AirFleets.net.

Notably, however, the Boeing aircraft are not Allegiant's first direct order for new aircraft. That came in 2015 when the airline ordered 13 A320s.

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The deal was a major win for Boeing, which has lagged behind competitor Airbus in the lucrative market for single-aisle jets. Earlier this month, Boeing lost sales from longtime customers KLM and Qantas to Airbus.

Terms of the sale, including final pricing, were not made public, as is typical in such transactions.

However, given the flush availability of used aircraft on the current market, the costs inherent with adding a new aircraft type to a fleet — including costs of maintenance and training pilots — and Allegiant's past inclination for opportunistic purchases, it is likely that the airline got a stellar deal from Boeing as the planemaker seeks to build momentum behind the MAX.

Related: Allegiant announces Allways Rewards, a brand new loyalty program for leisure travelers

The airline suggested that much in its press release announcing the sale.

"Allegiant’s unique ULCC business model has been primarily focused on high quality used aircraft to maintain lower fixed costs," the press release said. "However, the pandemic recovery cycle has brought to Allegiant unique opportunities to acquire new equipment, including this aircraft-family solution, which will add significant economic and operational benefits for years to come."

"Our approach to fleet has always been opportunistic, and this exciting transaction with Boeing is no exception," Allegiant CEO Maurice Gallagher added in the release. "While the heart of our strategy continues to center on previously-owned aircraft, the infusion of up to 100 direct-from-the-manufacturer 737s will bring numerous benefits for the future – including flexibility for capacity growth and aircraft retirements, significant environmental benefits, and modern configuration and cabin features our customers will appreciate."

Rendering courtesy of Allegiant.