Alaska Airlines ponders future of A320 leases

Alaska Airlines (AS, Seattle Tacoma Int’l) is evaluating options regarding the dry-leases of around two-thirds of its Airbus aircraft which are due to expire over the next three years, Executive Vice-President and Chief Financial Officer Shane Tackett said during the carrier’s quarterly earnings call. “Over the next three years, we will see the expiration of 42 of our 61 Airbus leases, which represents an opportunity to either extend those leases at far lower rates to what we pay today or possibly replace them with larger, more efficient aircraft,” he said. According to the ch-aviation fleets advanced module, Alaska Airlines currently operates fifty-one A320-200s and ten A321-200Ns. All of these aircraft were inherited from Virgin America (VX, San Francisco, CA), although six A321neo were delivered to Alaska after the merger. The carrier owns ten A320-200s and dry-leases the remaining 51. Tackett underlined that the expiration of the leases would not necessarily lead to the trimming of the airline’s fleet. As Alaska Airlines is “very cognizant” of its lease expenses, it will also consider sourcing cheaper aircraft to replace those that are set to expire. “We love all of our airplanes, but the [already retired] A319-100s and A320s are uneconomic relative to others. It’s a logical time as we’re resizing our fleet getting it to best-match demand, to really figure out how do we get the best economic aircraft on the field and with the A320s, you can either shrink that fleet, we can extend leases or we can replace them with something better,” Senior Vice-President (Fleet, Finance, and Alliances) Nat Pieper added. Pieper added that the carrier was talking with Airbus, Boeing, and an ensemble of lessors about its potential fleet changes. He underlined that Alaska Airlines was positive about the recertification of the B737 MAX and would factor this type into its considerations. It has thirty-two B737-9s on firm order from Boeing. Besides the 61 Airbus aircraft, Alaska Airlines’ fleet also comprises eleven B737-700s, sixty-one B737-800s, twelve B737-900s, and seventy-nine B737-900(ER)s, as well as three B737-700(BDSF)s.