Alaska Airlines accelerates the retirement of its ten A321-200neo

Alaska Airlines is expediting the retirement of its ten A321-200neo aircraft, which were inherited from Virgin America. The Chief Financial Officer, Shane Tackett, announced during a quarterly earnings call that these aircraft will be phased out by the beginning of the final quarter of 2023.

Tackett stated, ‘September 2023 will be the final month of operation for the Airbus fleet. At that point, we will retire the last ten A321neo aircraft, which were once part of a 72-aircraft fleet. This decision solidifies our future as a single-fleet operator by 2024. As a result of this accelerated phase-out, we anticipate incurring special fleet transition charges ranging from USD 300 million to USD 350 million by the end of the year.’

The average age of Alaska Airlines’ A321-200neo is 5.1 years, and all of them were originally ordered by Virgin America prior to its acquisition by Alaska Air Group. However, six of these aircraft were delivered directly to Alaska Airlines after the merger. The A321neo aircraft were previously scheduled to exit the fleet by the end of 2023. All ten A321neo aircraft are under dry leases: four from Jackson Square Aviation, two each from GECAS/AerCap and SMBC Aviation Capital, one from Merx Aviation Finance, and one from an unknown lessor.

The airline aims to finalize all financial transactions associated with the phase-out by mid-year. Nathaniel Pieper, Senior Vice-President (Fleet & Finance), stated, ‘[We are in] late-stage discussions with a variety of parties, including lessors, financial firms, and other airlines. Our goal is to complete the necessary paperwork for the ten aircraft transactions by the end of the second quarter.’

The expedited retirement of the A321neo aircraft follows the retirement of all ten A319-100s in 2020 and the last of the fifty-three A320-200s in early 2023. Chief Executive Ben Minicucci emphasised during the investor call that the rollover from A320s to 737-9s has added 28 additional seats per aircraft, which “allows [Alaska Airlines] to unlock growth efficiencies without adding departures within an already constrained operating environment”.