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

Jan 5, 2022

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.

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.

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

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.

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.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
17.24%-26.24% Variable
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

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.