Alaska Airlines plans to retire its MD-80 jets early and convert to a fleet of all Boeing 737s.
To do that, the airline said Monday that it plans to exercise options to buy eight more 737-800s from the Boeing Co., while also negotiating to speed up delivery of some planes already on order.
“This decision represents a major milestone in our transformation and moves us significantly along the path toward becoming an undisputed leader in our industry,” Alaska chief executive Bill Ayre said.
Alaska owns or has long-term leases on 23 MD-80s, single-aisle jets built by the former McDonell-Douglas that seat roughly 140 passengers. It had planned to keep the bulk of them operating past 2010, with the last of them flying until 2017.
But under the new plan, the airline will retire all of the MD-80s by the end of 2008, replacing them with new 737s.
Alaska acquired the options on the 737s last June, when it ordered 39 from Boeing. Executives said they plan to convert eight of those options to firm orders, while also acquiring additional options for the future.
The eight planes would be worth more than $510 million at list prices, but analysts say Boeing’s been giving discounts of about 30 percent on 737 deals.
The move will allow Alaska to adopt the one-type model that has been a success for competitor Southwest Airlines. Executives said Monday they anticipate saving between $118 million and $130 million a year, through streamlined maintenance, spare parts, training and other costs.
The 737-800s are more-fuel efficient than the MD-80s they’re replacing, plus hold 17 more passengers. And since they need less maintenance, Alaska estimates they’ll be able to use them on more flights each day.
Phasing out the MD-80s also will mean Alaska will no longer operate jets that have been problematic for them in the past. A fault in a tail mechanism was the suspected cause of a fatal crash in 2000, and last year, the airline announced it was stepping up inspection of the parts in question after a Federal Aviation Administration investigation.
Executives stood by the MD-80’s record and said the decision to retire the planes early was taken for economic reasons.
Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
