The Federal Aviation Administration has recently cleared the Boeing 737 MAX for service. The regulator has issued an airworthiness directive outlining the changes that need to be made to the Boeing 737 MAX and related documents and outlined the updates required to training procedures. Despite the pandemic which resulted in demand for air travel imploding, Boeing is in active discussions with potential customers to take up white tails, aircraft already built but no longer have a customer, while simultaneously gathering backing for the plagued Boeing 737 MAX in an effort improve the public’s image and acceptance of the jet that should drive Boeing’s cash flow in better times. In a first move after the ungrounding of the Boeing 737 MAX, Alaska Airlines now adds 13 Boeing 737 MAX aircraft to its lease plan.

Boeing looks for key customers

In an effort to restore confidence in the jet that was plagued by shortcomings in the design and certification resulting in two fatal crashes and a 20-month grounding, Boeing has been pitching the jet to various potential key customers. In a report published on investment research platform Seeking Alpha various potential customers including Ryanair, Alaska Airlines, Delta Air Lines, KLM Royal Dutch Airlines were flagged next to Southwest Airlines as a usual candidate for a Boeing single aisle jet.

Alaska Airlines fleet transformation takes shape

Alaska Airlines is one of the airlines with a very interesting fleet. The airline previously branded itself as an all-Boeing fleet, but since the airline acquired Virgin America in 2016 the airline adopted a fleet of Airbus single aisle aircraft including the newest Airbus A321neo. Integrating two fleets has shown to be challenging but a decision to reduce the Airbus fleet has been delayed for some time and so has an order decision for the Boeing 737 MAX of which the Alaskan carrier already had 37 directly on order via an order placed in 2016.

With demand for air travel falling, Alaska Airlines has accelerated the phase out of aircraft based on selection criteria such as cabin refurbishment, maintenance fees and efficiency. This has led to the retirement of the Airbus A319ceo fleet as well as a number of Airbus A320ceo aircraft.

The most recent development is that Alaska Airlines is making the most out of the situation, turning the airline industry crisis into a win as the airline has arranged a sale-and-lease back transaction with Air Lease Corporation for 10 Airbus A320ceo aircraft and will be leasing 13 Boeing 737-9 aircraft with first deliveries scheduled for the second half of 2021 pacing the removal of the Airbus aircraft. On one hand, the airline is raising some cash from the sale of the Airbus jets while it likely is also getting a very good deal on the aircraft that it will lease.

Alaska Airlines to emerge as all-Boeing

The announcement of the lease transaction is a positive for all parties involved. Boeing is looking for airlines that want to adopt the Boeing 737 MAX as it is cleared for the skies but amidst an unprecedented downturn in demand while lessors such as Air Lease Corporation are looking to place the jets on order with airline customers and Alaska Airlines is looking to simplify its fleets. The recent transaction allows Boeing to start putting together and reviving delivery flow and get a grasp of the demand profile for the jet that after 20-months of grounding is looking for a return to the skies while, in Alaska Airlines, it finds a customer that is slowly going back to an all-Boeing fleet.