All-Airbus Operator Allegiant Orders New Boeing Max Jets

 - January 5, 2022, 9:50 AM
Allegiant Air plans to begin taking delivery of its first Boeing Max jets next year. (Image: Boeing)

U.S. low-cost carrier Allegiant Air has placed a firm order for 50 Boeing 737 Max jets and reserved options on another 50, Boeing confirmed Wednesday. Under the contract, the Las Vegas-based Airbus A319/A320 operator will take delivery of an undisclosed mix of 737-7s and 737-8-200s—the high-density version of the Max 8—starting next year. Plans call for deliveries to run into 2025.  

"Our approach to fleet has always been opportunistic, and this exciting transaction with Boeing is no exception," said Allegiant chairman and CEO Maurice Gallagher. "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."

Allegiant's business model historically has focused on the acquisition of used aircraft to keep down fixed costs. However, said the airline, the pandemic recovery cycle has brought “unique opportunities” to acquire new equipment. Although neither party revealed the value of the transaction, analysts believe Allegiant stood in a position to extract deeper-than-usual discounts for the jets as Boeing endeavors to recover market share in a market segment where Airbus has taken a clear lead.

Allegiant said the arrangement with Boeing will allow it to replace aircraft scheduled for retirement while expanding the fleet to maintain the company's projections for an annual growth rate exceeding 10 percent.

"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," commented Boeing Commercial Airplanes CEO Stan Deal. "This deal further validates the economics of the 737 MAX family in the [ultra-low-cost carrier] market and we're excited to stand alongside Allegiant as they integrate these new airplanes into their fleet."

Now operating 108 A319s and A320s, Allegiant said it will continue to source Airbus narrowbodies in the used market. The airline signed a 12-year maintenance agreement with CFM for the Leap-1B-powered Boeing jets, which it said would also bring support for the existing Airbus fleet.