Allegiant Air to buy US exclusive Boeing 737 MAX 50 aircraft – source Reuters

By Eric M. Johnson and Tim Hepher

SEATTLE / PARIS (Reuters) – Allegiant Air is ready to order $ 50 billion worth of Boeing (NYSE 🙂 737 MAX aircraft at list prices, according to people familiar with the matter as it is. Catching the rise of post-pandemic US tourism.

Unexpected deals lead to a series of setbacks Boeing Co. and overturns the airline’s previous strategy of picking up second-hand aircraft at low prices, which helped stack more than 100 aircraft built by Boeing’s European rivals.

The change of supplier is the third disappearance of the airline in the next few weeks, this time working for Boeing, after the US aircraft manufacturer lost a tough mid-flight competition at Airbus KLM in the Netherlands https://www.reuters.com/business/ aerospace- defense / airbus-wins-dominant-share-air-france-klm-jet-purchase-sources-2021-12-16 and Australian Qantas https://www.reuters.com/business/aerospace-defense/airbus- win- request-upgrade-qantas-fleet-sources-2021-12-15.

Such “flips” are rare because of the cost of recycling pilots, but they reflect stiff competition for new businesses as the aerospace industry seeks to recover from the worst recession ever.

Boeing, Airbus and Allegiant Air, a unit of Allegiant Travel Co, declined to comment.

The agreement is the latest sign of accelerated growth among “very low-cost” carriers that combine bottom-up fares with optional charging. Such carriers are expected to emerge in a position of relative strength as a result of the COVID-19 pandemic.

“The entertainment market is coming back a lot from the business market,” said a person familiar with Allegiant’s plans.

ORDER RACE

The Las Vegas-based carrier uses a total of 122 A319 or A320 aircraft, of which only 13 were ordered directly from Airbus, according to European data.

737 MAX aircraft will contribute to Allegiant’s growth strategy and replace obsolete aircraft in the coming years, although it will continue to be an Airbus operator.

The order comes after at least a partial competition between the 737 MAX 7 and the Airbus A220, although two people said that some 8200 larger variants could also take part.

“This is horrible. Allegiant was on the A220 order line,” said Scott Hamilton, an analyst at Leeham Co., and the result suggested that Allegiant had received a “screaming agreement” from Boeing as well as the ability to get shipments faster.

The new Boeing aircraft would replace retiring aircraft and feed into Allegiant’s growth plans in the coming years.

Mexico’s Viva Aerobus announced a commercial alliance with Allegiant in December to offer flights between the United States and Mexico.

The deal, likely to be counted in Boeing’s December orders, limits Airbus’ narrow order race to the year.

Boeing recovered from a security crisis by selling around 700 MAXs by the end of November, losing two of the most watched competitions in the industry against Qantas Airbus and several subsidiaries of the Franco-Dutch group Air France-KLM.

Both planes will release their 2021 data next week.