LONDON – Alaska Airlines (AS) has signed a leasing agreement with Air Lease Corporation (ALC) for 13 new Boeing 737 MAX 9 aircraft.

As part of the deal, AS will sell 10 Airbus A320 aircraft to ALC in order to fund the deal. Deliveries are understood to be happening from the fourth quarter next year into 2022. AS also said that it will lease the A320 aircraft back from Air Lease for a short period of time after the sale is completed.

Photo: The Motley Fool

Udvar-Hazy Happy for the Order

Commenting on the news was ALC’s Executive Chairman, Steven Udvar-Hazy who expressed delight over the new transaction.

“We are honored and pleased to renew our long association and partnership with our friends at Alaska Airlines. These leased Boeing 737-9 aircraft from ALC will fill an important role on Alaska’s diverse route network, bringing the most technologically advanced and environmentally attractive aircraft type into Alaska’s fleet, just in time as we expect the airline industry will undergo a sustainable recovery starting in 2021.”

Also commenting on the news was Brad Tilden, Alaska’s Group Chairman and CEO who expressed why the airline chose ALC for the aircraft.

“Alaska’s relationship with Steve dates back to the early 1980s and we’re thrilled to work with him and ALC on an agreement that will enhance our fleet and advance our environmental, operational and financial performance. We found an opportunity to sell 10 planes that are not in our long-term plans and replace them with 13 of the most efficient narrow-body aircraft available.”

Photo: Everett Herald

Alaska’s Confidence in the MAX

The 13 new aircraft ordered from ALC now brings the total order book to 45 MAX aircraft, of which 32 are on order from Boeing. Five of the 45 aircraft are expected to be flying by the Summer, with the aircraft aimed to fly for training by March 2021.

With the airline also parking its Airbus A319 and A320 aircraft, this deal will leave AS having only 39 A320s and 10 A321neos left. This is of course very good news for Boeing, which even if it is not a new order per se, it is still expressing some level of public confidence into the program that has recently been re-certified to fly again by the FAA.

Photo: The Business Journals

A Positive End to the Year for AS?

This order announcement may end up concluding what has been a steady year for AS, even in the midst of a global pandemic. Back in February, the airline announced it would be joining the oneworld Alliance, but was later delayed due to the virus continuing to decimate the industry.

Whilst it placed 61 aircraft for US$1.2bn in funding, its passenger numbers increased by 168% and was subsequently able to get out the worst of it to the point it would be making that deal with ALC. This is however, something to end on a lighter note, especially with the AS Boeing 737 that struck a bear at Yakutat Airport as well.

Boeing’s new 737 MAX 9 has received FAA certification and is now being prepped for first delivery. Paul Weatherman photo. (PRNewsfoto/Boeing)

What Does This Order Represent?

For AS, this order represents an expansion in its fleet renewal strategy, especially with the hiving off of the older Airbus A320s and A319s in its fleet.

While the aircraft will return in the form of a sale and leaseback, it will then be down to ALC to either retire the aircraft or find a new owner. It will be interesting to see what routes the MAX will operate on next year, especially on the AS route network being substantive on the West Coast.

But for Boeing, the manufacturer can breathe another element of relief, especially with the significant positive awareness of the aircraft. Of course, however, the work is far from complete.

Featured Image: Alaska Airlines Boeing 737-9 MAX. Photo Credit: Alaska Airlines