As 2022 starts, Boeing appears set to bag an order for 50 new 737 MAX aircraft from American ultra-low-cost carrier Allegiant Air. The move would be significant for the all-Airbus carrier and represents the next step for Allegiant as it plans to grow across the US and into some international markets.
Allegiant set to order Boeing 737 MAX
A Reuters report has sources indicating that Allegiant is closing in on a Boeing 737 MAX order. For 50 aircraft, the order is likely weighted to the 737 MAX 7, which is the smallest MAX variant that Boeing offers. Allegiant does not currently fly any Boeing aircraft, and the deal represents a return to a mixed fleet after a few years as an all-Airbus carrier.
The order has not yet been finalized, and in the competitive world of aircraft orders, it is possible that Airbus could come in with another option. Allegiant has also been reportedly weighing the Airbus A220 in this campaign.
Allegiant looks at the next chapter
Allegiant Air is an ultra-low-cost carrier. It focuses its operations around low-frequency operations connecting travelers to leisure destinations. It is known for being opportunistic and flying to some smaller destinations in places like Grand Forks, North Dakota, and Great Falls, Montana. These destinations have traditionally worked well for Allegiant.
Coming out of the crisis, leisure travel has reigned supreme. Domestic leisure travel has come back strong, giving airlines like Allegiant a huge boost. That rebound has pushed it to be one of the first airlines to get back to its pre-crisis growth trajectory and has been on a steady clip of adding new cities and routes throughout the year.
A new aircraft order for the MAX would commit Allegiant to a new chapter of growth. Allegiant has traditionally ordered mid-life, used aircraft, but the time may have arrived where those planes will not meet the mission that Allegiant could use them for. The existing Allegiant fleet includes the Airbus A319 and A320ceo aircraft. Allegiant has not ordered the A320neo family of aircraft.
While ordering mid-life, used aircraft is a way to be opportunistic and keep ownership costs low, it also means Allegiant is behind in terms of technology. Newer aircraft, like the 737 MAX, offer enhanced fuel efficiency, newer technology, and a greater range that allows for flexibility. Theoretically, Allegiant could use the MAX to get back into markets like Hawaii that it once tried to serve with Boeing 757s.
There is evidence that Allegiant is looking at growing beyond what it has done over the last few years. One example is the proposed alliance with Viva Aerobus that the airline expects to use to launch international service to Mexico. The two airlines are looking to accomplish plenty in this sphere, and Allegiant would need the jets.
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Why the 737 MAX makes sense
Allegiant had been looking at the 737 MAX against the Airbus A220-300. What this means is that Allegiant was looking at smaller narrowbody aircraft. The next generation of the Airbus A320neo family, the A319neo, has not yet entered commercial service, and it has not been very popular. Airbus has been focusing more of its sales energy on the Airbus A220 family of jets, which have proven to be customer favorites.
The problem with the Airbus A220-300 is that it would be the only jet that made sense for Allegiant from that family. The A220-100 is likely a little too small for the airline. Most low-cost airlines traditionally fly planes seating between 140 and 200 passengers. While the A220-500 remains of interest for Airbus, it has yet to launch the aircraft formally.
The 737 MAX family, meanwhile, includes the MAX 7, MAX 8, MAX 9, and MAX 10. While the MAX 9 and MAX 10 might be a little too big for Allegiant, the MAX 8 could make sense and, down the line, be a replacement for some of the Airbus A320ceo jets. If Allegiant is getting a good deal on the 737 MAX 7, that flexibility with the future fleet family is certainly something to note.