It seems Boeing is off to a swinging start to 2022, with them gaining a signed order from Allegiant Air.
Allegiant Boeing 737-MAX’s – Image, The Boeing Company
The order is comprised of 50 737 MAX jets, with options for 50 additional. Terms and pricing were not disclosed.
It marks Boeing’s first U.S. ultra-low-cost carrier (ULCC) deal (with other carriers choosing Airbus instead).
Allegiant Air has selected two models – the 737-7 and 737-8-200 – in the 737 MAX family for its deployment. An exact breakdown of how many of each the airline will take out has not been announced yet.
The 737-7 will provide opportunities to operate new routes which might have lower demand, with low risk, whilst the 737-8-200 will provide the trunk capacity.
Boeing notes to Allegiant’s current fleet, the new 737 models will reduce fuel use and carbon emissions by 20%.
In Quotes
Maurice J. Gallagher, Jr., Allegiant chairman and CEO sid
“Our approach to fleet has always been opportunistic, and this exciting transaction with Boeing is no exception,”
“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.”
Stan Deal, Boeing Commercial Airplanes president and CEO said
“We are thrilled that Allegiant has selected Boeing and the 737 MAX as they position themselves for future growth, improved efficiency and operational cost performance.”
“This deal further validates the economics of the 737 MAX family in the ULCC market and we’re excited to stand alongside Allegiant as they integrate these new airplanes into their fleet.”
Passenger Experience Notes
According to the airline, the Boeing 737s will come equipped with several in-cabin features – such as Boeing Sky Interior and Space Bins. They also say that the new planes will provide more legroom and make storing and retrieving carry-on luggage easier for passengers.
Of course, that will depend on what seats are chosen for by the airline.
Introduction to service
The airline currently operates a fleet of Airbus A320 and A319 aircraft, with 108 currently in its fleet. Interestingly, Allegiant will continue its opportunistic purchasing, with the airline stating they will continue sourcing A320s in the used market.
Boeing and Allegiant will partner on entry-into-service support, enabling a smooth transition as the carrier adds the 737 into its operation.
According to the airline, Allegiant will take delivery of an initial group of planes in 2023, with the remaining deliveries scheduled throughout 2024 and 2025.
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“Our approach to fleet has always been opportunistic, and this exciting transaction with Boeing is no exception…”
A very nice way of saying “Boeing isn’t making much money on these planes.”
I’d go on to say delivery slots are an issue too.
But a bargain shop? Quite probably….
I just learned the new 737s will have CFM engines, and Allegiant will receive “enhanced” support on the existing CFM-powered Airbus fleet, so there’s that too. (H/T; Cranky Flier)
Wall Street, still under the Southwest “one plane type is always best” spell, is not happy, but they aren’t taking into account the sweet cost structure of the deal, earlier delivery slots, and that Allegiant’s route structure makes it easy to route the 737s and Airbuses to the correct maintenance facilities without major issues. There’s some additional marginal expense (training, etc.) on having two pilot groups, but the benefits apparently outweigh the costs.
Normally, I’d argue the Airbuses offer a better customer experience, but the way Allegiant packs them in I’m not sure it matters.