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Allegiant Air to Add 100 737 MAX Aircraft
U.S. ultra-low-cost carrier Allegiant Air has announced an order of 50 Boeing 737 aircraft comprising a mix of 737-7 and 737-8-200 models — model names airlines have started using to replace that of the beleaguered Boeing 737 MAX — with the option for a further 50 aircraft. The announcement by the airline’s parent company Allegiant Travel Company is somewhat of a surprise for the leisure carrier given that its current fleet is comprised of 108 Airbus A319 and A320 aircraft that were all previously owned.
Maurice J. Gallagher, Jr., Allegiant chairman and chief executive officer stated, “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.”
The order is also the first deal for Boeing of their 737 series aircraft with a ultra-low-cost carrier based in the U.S.
“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,” Boeing Commercial Airplanes president and chief executive officer Stan Deal said in a statement. “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.”
The first batch of new 737s is scheduled to be delivered to Allegiant in 2023 with the remainder of the initial order arriving throughout 2024 and 2025. The more fuel-efficient 737s will replace retiring aircraft and assist in the airline’s goal of 10 percent annual growth. The press release from Allegiant also adds that the airline will continue to source additional used A320 aircraft to expand their fleet. In addition Allegiant has signed a 12-year exclusive maintenance agreement with CFM the makers of the LEAP 1-B engines chosen for the 737s. The maintenance agreement will also cover support for Allegiant’s current Airbus fleet.
Allegiant has benefited from the rebound of the US domestic leisure travel market in the wake of the impact of coronavirus. The airline’s latest traffic figures for November 2021 showed a 7.8% increase in the number of passengers carried on its scheduled services in comparison to November 2019. The number of scheduled flight departures had also increased (by 9 percent) adding 10 percent more capacity to Allegiant’s network. However the all-important metric of load factor, particularly crucial for an ultra-low-cost carrier, fell by 2.8 percentage points from 80.4% in November 2019 to 77.6% in November 2021.
Allegiant Travel Company has scheduled a call with investors on Thursday to discuss the Boeing 737 agreement.
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