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

Jan. 05, 2022
3 min read
Allegiant used to love flying used planes; now it's betting big on new jets
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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.

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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.

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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.

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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Best card for premium perks while traveling
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
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
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  • Intro Offer
    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

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    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
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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.

Pros

  • 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 1,400+ lounges, including Capital One Lounges and our 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