A Landmark Deal for the Future of Air Travel
Strategic Fleet Enhancement: Replacing Aging Aircraft and Fueling Expansion
Alaska Airlines has committed to its largest aircraft acquisition to date, securing 110 planes from Boeing. This substantial procurement includes 105 units of the yet-to-be-certified Boeing 737-10 model, alongside five 787 Dreamliner wide-body jets designed for international routes. The purpose of this significant investment is twofold: to systematically replace its aging aircraft and to bolster its fleet size, ensuring future growth and operational efficiency.
Restored Trust: A Critical Vote of Confidence Following Recent Setbacks
This major order from Alaska Airlines represents a crucial endorsement for Boeing, particularly after a challenging period. Early in 2024, an Alaska Airlines Boeing 737 MAX 9 experienced a mid-air incident involving a detached door plug, attributed to missing bolts. This event triggered extensive investigations, disrupted production schedules, and prompted leadership changes at Boeing. The airline's decision to commit to a long-term order, extending through 2035, suggests a renewed belief in Boeing's manufacturing integrity and future direction.
Expanding Horizons: Projected Fleet Growth and Delivery Timelines
The agreement between Alaska Airlines and Boeing encompasses an option for an additional 35 737-10 aircraft, which can be exercised within the same delivery timeframe. By 2035, the airline anticipates its total fleet size will increase from its current 413 aircraft to an impressive 550 planes. Senior Vice President Shane Jones from Alaska Airlines informed CNBC that the 737-10 is expected to receive federal approval this year, with initial deliveries slated to begin in 2027.
Market Dynamics: Boeing's Robust Backlog and Stock Performance
Boeing's most recent quarterly financial disclosure revealed a significant order backlog, encompassing over 5,900 commercial aircraft valued at $636 billion. In recent market activity, Alaska Airlines' stock experienced a slight downturn, while Boeing's shares saw a modest increase of 0.5%. Over the past year, the performance of these two companies has diverged, with Alaska Airlines' shares declining by nearly a quarter, contrasting with Boeing's shares which surged by over 30%.