U.S. carrier Allegiant Air will purchase fifty Boeing 737 MAX jets.
According to people with knowledge of the issue, Allegiant Air is poised to purchase fifty Boeing 737 MAX jets worth $5 billion at the list price.
The airline reportedly refuses proposals from the traditional supplier Airbus because the low-cost carrier hopes to take advantage of a boom after the pandemic in U.S. tourism.
The unexpected deal comes from several setbacks to Boeing Co and reversing its previous buying second-hand aircraft for sale, which allowed it to acquire over 100 aircraft built by Boeing’s European competitor.
The change of supplier is the third airline to depart in a few days, and this is to Boeing’s advantage following it was the U.S. planemaker lost hard-fought medium-haul competitions against Airbus and Airbus at Dutch KLM as well as Australia’s Qantas.
The kind of “flips” are rare due to retraining pilots. Yet, they reflect an intense competition for new businesses in the aerospace industry as it tries to rebound from its worst recession.
Boeing, Airbus and Allegiant Air, which is part of Allegiant Travel Co, all did not respond to requests for comment.
This deal is the latest evidence of the growing trend of “ultra-low-cost” carriers that combine low-cost fares with additional fees.
These carriers are likely to emerge from the position of relative strength after this COVID-19-related pandemic.
“The leisure market is coming back in droves relative to the business market,” said one of those who are familiar with Allegiant’s plans.
The Las Vegas-based airline operates in total the 122 A319 and A320 jets, with only 13 of them purchased directly from Airbus by European information.
The 737 MAX planes will aid Allegiant’s growth plan and replace old aircraft in the coming years. However, it will still be an Airbus operator.
The decision comes following an ongoing battle partly among two aircraft: the 737 MAX 7 and the Airbus A220, two of the participants, said.
However, some variants of the larger 8200 could also be involved.
“This is huge. Allegiant was in line to order the A220,” Leeham Co analyst Scott Hamilton said, adding that the result indicated Allegiant was offered a “screaming deal” from Boeing and also the capability to deliver more quickly.
The new Boeing planes will replace the old jets and feed Allegiant’s growth plans in the coming years.
Mexican airline Viva Aerobus in December announced an alliance commercial with Allegiant to provide routes between the United States and Mexico.
It is expected to be considered in the December orders for Boeing, which is the culmination of a competitive annual order battle with Airbus.
Boeing recovered from a security crisis to sell around 700 MAX until the end of November and then lose two of the most well-watched contests to its rival Airbus on Qantas and other subsidiaries of the French-Dutch group Air France KLM.
Devika Chowdhury – She is a professional news editor, writer, and blogger for the last 10 years. She is working with NewsGater as an off-beat news editor cum writer.