Alaska Air orders 50 737s from Boeing
BY MARY JANE CREDEUR Bloomberg News
Friday, October 12, 2012
10/12/12 at 4:32 AM
Boeing Co. won an order for 50 narrow-body 737 jets with a $5 billion catalog value as Alaska Air Group Inc. refreshes its mainline fleet and caps a round of purchases by the biggest U.S. carriers.
About two-thirds of the new aircraft will be used to replace older 737s in the airline's fleet of 120 Boeing jets, with the rest to be used for growth, Alaska Air Chief Financial Officer Brandon Pedersen said Thursday in a telephone interview. Deliveries begin in 2015.
"The growth really occurs in the second half of the next decade," he said. "We have options for deliveries in 2015 through 2024, and those will really be the mechanism we use to modulate growth up and down. To the extent we see profitable opportunities and need more airplanes, we'll exercise those options and bring those in."
The purchase announced Thursday completes a round of fleet renewal by the largest U.S. airlines and brings Boeing's order book for the 737 Max to 858 since the model went on sale late last year. Boeing has said it expects about 1,000 orders for the Max by the end of 2012.
Thirty-seven of Alaska Air's new planes will be 737 Max variants that the Chicago-based planemaker developed in response to Airbus SAS's upgraded A320neo narrow-body jet.
Earlier this year, United Continental Holdings Inc. agreed to buy 150 Boeing 737s, following last year's purchase of 100 Boeing 737s by Delta Airlines Inc. and Southwest Airlines Co.'s order for 208 Boeing 737s. AMR Corp.'s American Airlines agreed to acquire 460 single-aisle jets split between Boeing and Airbus in July 2011 before seeking bankruptcy protection in November.
The 737 Max is 13 percent more fuel-efficient than the current-generation models of the jet, which translates into $1 million to $1.5 million in annual fuel savings per plane, Pedersen said.
Original Print Headline: Boeing wins $5 billion jet order