There has been some discussion about the combined fleet. We believe that despite the chatter, the newer, bigger, Alaska will keep both Airbus and Boeing in the fleet. Like the other big airlines, they need to buy from both to keep both OEMs honest.
But the interesting thing is how the fleet will breakdown. Let’s look at the active fleet first.
The VA fleet is leased, providing the new Alaska with fleet flexibility as it considers what to do next. Certainly the volume of aircraft being acquired is sufficient to ensure they can run both fleets to 2020 when leases expire. Based on what the market is doing, we expect to see the 737-400s get retired as they reach their next big checks and by end of 2017 should all be gone. Then we think the A319s to be next to go. The 737-700s have value in that the second hand market is kept strong by Southwest Airlines. But even then, these smaller A319s and 737-700s may not be the optimal size for new Alaska. It would be better to focus on the A320 and 737-800 sizes.
Which brings us to what might happen looking out into the future. The next table lists what is on order.
As we can see, the smaller jets are not attractive to either airline. We think the new Alaska will focus on streamlining its fleet as it grows familiar with the Airbus. With nearly equal numbers of A320s and 737-800s, these could form the core of the fleet. Both offer near identical economics. But the the test comes looking at the bigger aircraft – A321 vs 737-900. Alaska is Boeing biased, which is fine. But as they learn about the A321, especially the A321neo, this is likely to change. The A321neo is an aircraft that allows Alaska, which likes long thin routes, an opportunity to experiment like never before. For example, what might Alaska do with an aircraft like that?
So let’s think of a few options – starting with Honolulu. The A321neo in Alaska’s hands can do a lot of interesting routes. It would, to say the least, be very disruptive. Service to New Zealand? How about the Micronesia market? Pretty much anywhere in the Midwest to Hawaii? Hawaii to Central America?
Then look at the same range maps from Seattle or San Francisco. As Alaska grows any base on the US east coast, Europe opens up. The A321neo becomes a powerful tool for all sorts of disruptive service.
We think as Alaska discovers the capabilities of this aircraft we might see 737-900ER orders convert to MAX8 and even the MAX9 go to MAX8. To balance this Alaska may then convert some A320neo to A321neo. This is speculation and its early days. But the fleet potential for new Alaska is very interesting.
