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Last Trade - 06/05/21

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Alaska Airlines agrees to buy 23 Boeing 737 MAX jets

Tue 22nd December, 2020 2:00pm
By Eric M. Johnson
    SEATTLE, Dec 22 (Reuters) - Alaska Airlines  ALK.N  has
agreed to buy 23 Boeing Co  BA.N  737 MAX 9 jets, the companies
said on Tuesday, confirming an Oct. 8 Reuters report that the
U.S. planemaker was in talks with Alaska to stimulate demand for
the jet's comeback. 
    The order, worth some $2.96 billion at list prices before
expected steep discounts, comes less than three weeks after
European budget airline Ryanair  RYA.I  also placed a lifeline
order for 75 Boeing 737 MAX jets.*:nL1N2IJ19U
    Boeing is battling to build momentum for the 737 MAX as its
cash-cow jetliner re-enters commercial service following a
20-month safety ban triggered by fatal crashes.*:nL1N2II1AO
    "We like to keep the balance sheet strong so that in times
like this we can be contrarian and make moves to fundamentally
improve the competitive position of the company," Alaska
Airlines Chief Executive Brad Tilden told Reuters.
    Tilden declined to discuss the final price tag, or whether
France-based Airbus  AIR.PA  had submitted a rival proposal.
    The deal was expected to include significant discounts given
the 737 MAX's recent woes and plunging demand for airplanes
during the coronavirus crisis, industry sources have said.
    Even at a fraction of the MAX's list price of $129 million,
the deal could help Boeing to stem a cash hemorrhage caused by a
stockpile of roughly 450 undelivered MAX jets.
    The deal also accelerates a shift in Alaska's fleet back
towards Boeing from Airbus. Alaska Airlines operated an
all-Boeing fleet until it acquired Virgin America in 2016.
    Seattle-based Alaska Airlines, the fifth largest U.S.
passenger carrier, flies 166 older Boeing 737s and 71 Airbus
A320-family aircraft.
    Alaska, which already had ordered 37 MAXs before the
grounding, has one of the strongest balance sheets among U.S.
airlines. Analysts believe it could become more competitive than
its peers after the pandemic.
    In late November, Alaska Air Group Inc  ALK.N  said it would
lease 13 new Boeing 737 MAX 9 planes from Air Lease Corp  AL.N ,
and said it would sell 10 Airbus A320s to Air Lease.

 (Reporting by Eric M. Johnson in Seattle; Editing by Richard
 ((; +1 206 707 1218; Follow me
on Twitter @ByEricMJohnson;))
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