Allegiant prefers the economics of the Boeing 737 MAX 8 over the smaller MAX 7 as its plans for premium seating change how it evaluates the two aircraft.
The MAX 7 originally accounted for the majority of Allegiant’s Boeing commitment. In January 2022, the airline announced an order for 50 aircraft, split between 30 MAX 7s and 20 high-density MAX 8-200s, with options for another 50 jets.
The agreement, signed in December 2021, was Allegiant’s first direct Boeing order and marked a shift for a carrier that had largely built its business around buying used aircraft. At the time of the announcement, Allegiant operated 108 Airbus A319s and A320s.
Boeing said the new jets would reduce fuel consumption by about 20% compared with the older Airbus aircraft.
Speaking during the carrier’s third-quarter earnings call Wednesday, President and Chief Financial Officer Robert Neal said the MAX 7 initially offered an attractive balance between the cost of operating each flight and the cost per seat.
“When we did the order, we really liked the MAX 7 because we were looking at both the MAX 8 and MAX 7 at very high density,” Neal said. “And so you’ve got a really nice trip cost seat cost mix with the MAX 7.”
That calculation has changed as Allegiant expands its extra-legroom Allegiant Extra product and prepares to introduce Allegiant First.
“But over time, as you’ve seen us roll out incremental premium offerings at the moment through Allegiant Extra and eventually with Allegiant First, the seat cost just sort of loses pace with the MAX 8,” Neal said. “And so we prefer the cost economics of the MAX 8 at this point.”
Allegiant began shifting its order toward the larger variant in September 2023. An amended agreement retained the 50 firm aircraft but increased the number of MAX 8-200s, reduced the number of MAX 7s and expanded the option pool to 80 aircraft.
The MAX 7 faced years of certification delays, including work to redesign its engine anti-ice system. The FAA approved the variant on Aug. 3, after requiring changes to that system, flight-control software, and cockpit alerts.
The ultra-low-cost carrier added to its MAX 8 commitments last month, exercising six options for delivery in 2028. That brought its firm Boeing order to 56 aircraft, including 22 delivered through Oct. 23, with 74 options remaining.
