US’s Allegiant Air details fleet renewal amid 737 MAX order
Allegiant Air (G4, Las Vegas Harry Reid) has outlined tentative plans to begin retiring its oldest A320-200s and A319-100s as it adds fifty new B737 MAX and second-hand A320 Family jets.
“We will continue to acquire and primarily operate Airbus used A320 aircraft,” Executive Vice-President and Chief Financial Officer Greg Anderson stressed during an investor briefing.
Allegiant Air said it would be adding around 25 aircraft per year over the next six years, including the newly ordered B737 MAX. Part of around 50 aircraft from this pool will replace thirty-five A319s and twenty-three oldest A320s configured for up to 177 passengers. The retirements of the latter are scheduled to begin this year, while the A319s will begin leaving Allegiant Air’s fleet around 2025. The remaining aircraft will be for growth as Allegiant targets a 10% annual expansion rate. The carrier indicated a “placeholder” assumption that it would order an additional 22 used A320ceo Family aircraft by 2025.
The leisure-focused ultra-low-cost carrier underlined that the decision to order thirty B737-7s and twenty B737-8-200s, with options for a further fifty B737 MAX, was driven by a combination of factors but which were still very much in line with Allegiant Air’s strategy of opportunistic, capital-light deals. The carrier argued that the Boeing jets were selected due to near-term aircraft availability, proven upgauging opportunities due to the range of variants, attractive pricing, and engine manufacturer commonality with the airline’s A320 Family jets, all of which are powered by CFM International. Anderson highlighted that the A320neo was not available in the near term, while with the A220s were handicapped by a lack of clarity on potential larger variants.
Allegiant said it had a “strong preference” for financing and owning the aircraft directly but did not exclude the possibility of sale/lease-back transactions. The ULCC expects to pocket around USD300 million in cash tax savings on the transaction. The benefit is due to the Trump-era depreciation bonus programme that expires in 2025. Anderson underlined that the impending expiration of the assistance programme was another factor that drove Allegiant Air’s decision to acquire new aircraft.
The carrier disclosed that all of its B737 MAX would be custom built by Boeing for Allegiant Air and were not “whitetails” not taken up by other customers.