Alaska Air Group (NYSE: ALK) will add 30 mainline and regional aircraft during the next three years, including 13 Boeing 737 MAX jets, the company said Wednesday in a show of confidence about prospects for a domestic travel recovery.
The parent company of Alaska Airlines said it expects its domestic passenger business to return to pre-COVID levels by the summer of 2022, which will require more aircraft.
Alaska is exercising options for the 13 Boeing 737-9 MAX for delivery in 2023 and 2024, and is adding 17 new Embraer 175 jets in 2022 and 2023. Eight of the Embraer 175s are actually being purchased by regional capacity provider SkyWest, which will also operate them for Alaska. The other nine will be operated by Alaska subsidiary Horizon Air.
Alaska Airlines received its first two 737-MAX from Boeing (NYSE: BA) earlier this year and both entered service in March.
In December, Alaska added 23 firm orders and 15 options to its overall order with Boeing. The airline has committed to take 68 MAX jets, including 13 that it will lease from an asset management company.
The 68 Boeing aircraft will mostly replace Alaska’s single-aisle Airbus fleet as the company opts for a single fleet type that is more economical to operate.
Terms of the deal were not disclosed, but it is likely that Alaska received favorable pricing as aircraft manufacturers look to regain business destroyed by the pandemic as airlines shrank and canceled, or postponed, orders to preserve cash.
The 737 MAX returned to service in the U.S. in December after a 20-month flight ban resulting from the deadly crash of two jets because of faulty flight control software that has since been corrected.
Narrow-body jets do not carry huge amounts of cargo, but help keep commerce flowing because their frequent schedules in passenger networks help when companies need to move smaller shipments.
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