Allegiant Air ended last year with four Boeing 737 Max 8 aircraft after taking three of the type sooner than previously expected.
The Las Vegas-based leisure carrier had anticipated introducing a lone 737 Max 8 into service before the close. However, that earlier prediction came amid a weeks-long strike by Boeing’s unionised machinists, which shut down Boeing’s Seattle-area commercial aircraft production for about five weeks.
At the time, a few 737s with Allegiant liveries had reportedly rolled of Boeing’s production line in Renton, but still needed “final touches” and were delayed as a result of Boeing’s machinists’ strike.
Boeing rebounded from the production halt and delivered the jets more quickly than Allegiant had forecast.
Allegiant’s new 737 Max 8s are helping “address operational inefficiencies caused by previous aircraft delivery delays”, chief executive Greg Anderson said during the company’s 4 February earnings call.
The discounter has previously been forced to adjust its fleet renewal plans after several 737 delivery delays. Originally, it had expected to take 12 new jets from Boeing last year.
While Boeing estimates it will deliver a dozen Max 8s to Allegiant this year, the carrier is planning “conservatively” to take nine of the type.
Over the same period it plans to retire 12 of its older Airbus A320-family jets, ending this year with 122 aircraft in service – three fewer aircraft than it reported operating as of 31 December.
“Fortunately, we own the vast majority of our aircraft, which has allowed the fleet team to strategically sell older, underutilised A320 assets in a favourable market, resulting it substantial cash proceeds,” Anderson says.
“The sale of these assets is aligned with our growing confidence in the delivery schedule from Boeing, giving the firmness of the aircraft market and the timing of our order.”
Allegiant expects most of its 2025 passenger capacity growth will come from higher aircraft utilisation during peak periods of leisure traffic, also pointing to the greater efficiency and ”earnings potential” of its new and incoming 737 Max 8s over its older A320s.
Nearly half of Allegiant’s fleet has been configured with its new Allegiant Extra premium seating product, compared with under a quarter of its fleet on the same date last year.
Allegiant took a significant $216 million loss during the fourth quarter, compared with a loss of $2 million during the same period of last year, as operating costs outpaced revenue.
