Will Alaska Air delay purchase of B737MAX? (2014, leasing)

[PacoMartin]

Alaska Air is the last of the four USA customers to not receive their first B737MAX. The delay was more to do with their financial situation than anything else.

It seems like logically the smart thing to do would be to delay purchase another six months in case there is another accident. Alaska still has not cancelled the A320neo order they inherited from Virgin America.

[MLSFan]

Why delay it? With the bad PR, maybe they can get a discount since no one else wants to fly them?

By the time they have finances together, the problem will be fixed or replaced and they still get a plane that is cleared to fly

[AKStafford]

Hasn't Boeing already released the software fix?

[flyonpa]

Originally Posted by AKStafford

Hasn't Boeing already released the software fix?

End of April is the "current" date for it's release.

[PacoMartin]

Originally Posted by MLSFan

By the time they have finances together, the problem will be fixed or replaced and they still get a plane that is cleared to fly

Alaska Airlines was going to get their first delivery in 2017 or 2018 along with the other USA airlines, but they delayed until June 2019 to get financing in order.

First Delivery B737MAX
26 Aug 2017 Southwest Airlines (34 deliveries)
28 Sep 2017 American Airlines (24 deliveries)
23 Apr 2018 United Airlines (14 deliveries)

Presumably Boeing is not going to make any more deliveries until the MAX is cleared to fly.

My question is should Alaska Air wait for a year and see if there is another accident.

[Cloudy Dayz]

Originally Posted by MLSFan

Why delay it? With the bad PR, maybe they can get a discount since no one else wants to fly them?

By the time they have finances together, the problem will be fixed or replaced and they still get a plane that is cleared to fly

I think that would be a really bad decision for them. It would not save them money in the long run. Here is why. Take a look at the thread in the Aviation Forum. This problem is just the tip of the iceberg. These planes are poorly designed and inadequately tested. It's pretty obvious the model is already end of the line. I suppose Boeing could still redesign them and turn them around and make it a successful model, but I think the odds of that happening are low. The public has lost all confidence in these planes, and it will be almost impossible to get that confidence back.

So if Alaska Air was to take delivery of 737 Max planes for a discount, they would be receiving a limited edition of a very buggy aircraft, which would likely cost them a lot more money for maintenance, to say nothing about the revenue they would lose from passengers who don't want to fly on these death traps.

[PacoMartin]

Originally Posted by Cloudy Dayz

So if Alaska Air was to take delivery of 737 Max planes for a discount,....

Alaska Airlines placed an order for 32 B737MAXs almost 6.5 years ago.

They only merged with Virgin America on March 22, 2017. As a result of the merger, Alaska inherited 71 existing Airbus jets and an order for an additional 32 Airbus A320/321neo orders. Although they have not yet canceled the Airbus order, the scuttlebutt was that they were going to try to return to an all B737 fleet.

Order Date Customer Name Total

• 13. Dec. 2011 Southwest Airlines 150
• 12. Jul. 2012 United Airlines 99
• 11. Oct. 2012 Alaska Airlines 32
• 1. Feb. 2013 American Airlines 100
• 13. May. 2013 Southwest Airlines 30
• 4. Nov. 2013 Southwest Airlines 20
• 27. Dec. 2016 United Airlines 38
• 20. Dec. 2017 Southwest Airlines 40
• 29. Mar. 2018 Southwest Airlines 40

First Delivery B737MAX
26 Aug 2017 Southwest Airlines (34 deliveries)
28 Sep 2017 American Airlines (24 deliveries)
23 Apr 2018 United Airlines (14 deliveries)

Alaska delayed the first delivery of the MAX in May 2018 to give them time to absorb merger costs and to slow down growth. That decision was made almost 6 months before the Lion Air crash.

I don't think that there is going to be a discount once they take delivery.

Alaska Airlines is somewhat different, as their major hub is in Seattle Airport, just a few miles away from where the B737 is manufactured. If they abandon their Boeing jets, there may be a boycott. If that happens it may make more sense for them to simply merge with Jetblue.

[Cloudy Dayz]

The emerging 737 MAX scandal, explained
It’s more than bad software.

The emerging Boeing 737 MAX scandal, explained - Vox

[Soccernerd]

Originally Posted by MLSFan

Why delay it? With the bad PR, maybe they can get a discount since no one else wants to fly them?

By the time they have finances together, the problem will be fixed or replaced and they still get a plane that is cleared to fly

This. Garuda Indonesia already cancelled theirs, and besides the political pressure, I think it was mostly just a way of getting out of an order. A lot of governments are just shoveling money into their flag carriers. The MAX crashes are a convenient catalyst.

[PacoMartin]

Originally Posted by Soccernerd

The MAX crashes are a convenient catalyst.

That often happens with engineering issues. Garuda placed the order for fifty MAX on 12. Sep. 2014. They find that they no longer want the jets and the accident is a convenient way to get out of the order without paying a big penalty. Only 1 MAX jet has been delivered.

Ethiopian Airlines Group placed an order for twenty MAX on 1. Sep. 2014 (and a follow up for an additional ten on 22. Jul. 2016). So far they have made no attempt to cancel their jets.Only 5 MAX jets have been delivered.

Lion Air ordered 201 MAX jets on 22. Feb. 2012. They have not received any more jets since their crash in October 2018, but as of right now the order stands. Only 14 MAX jets hae been delivered.

Obviously, some other airlines may want to cancel, but they may still be facing substantial financial penalties. In addition it could be a decade at the current rate of production to buy jets from Airbus.

China has ordered 182 MAX jets for eleven airlines and one leasing company. Only 78 jets have been delivered as of end of February 2019. China recently bought 300 jets from Airbus, so they may have the clout with Airbus to buy replacement jets and get them delivered sooner than 10 years from now. They also have the alternative of only buying the A321 from Airbus and having COMAC produce smaller jets.
I would be most worried about China canceling their MAX orders.