Alaska Airlines Receives First Of 13 Boeing 737 MAX Jets From ALC

On Monday, Alaska Airlines received the first of 13 new Boeing 737 MAX jets from Air Lease Corporation…

Alaska Airlines Receives First Of 13 Boeing 737 MAX Jets From ALC

On Monday, Alaska Airlines received the first of 13 new Boeing 737 MAX jets from Air Lease Corporation (ALC) on long-term lease. This delivery is part of a lease agreement announced late last year with ALC that Alaska leveraged to reduce its Airbus A320 fleet in favor of more MAX jets.

Alaska has taken another Boeing 737 MAX. Photo: Alaska Airlines

Alaska takes a new Boeing 737 MAX

Seattle-based Alaska Airlines took a brand new Boeing 737 MAX 9 on Monday on lease from Air Lease Corporation. While this is not the first 737 MAX for Alaska, it is the first from a major deal Alaska signed to accelerate its Airbus retirements.

According to data from RadarBox.com, the aircraft, registered as N921AK, flew from Seattle’s Boeing Field (BFI) to Ted Stevens Anchorage International Airport (ANC), which is the largest airport in the carrier’s namesake state. It is also a hub for Alaska Airlines.

Alaska Airlines Receives First Of 13 Boeing 737 MAX Jets From ALC
The ferry flight of the Alaska 737 MAX from Seattle to Anchorage. Photo: RadarBox.com

This is the seventh 737 MAX 9 to enter Alaska’s fleet and comes as the carrier continues to push forward with its fleet renewal plan that puts a heavy focus on the MAX. It still has a healthy order book for the MAX.

The deal with ALC

In November 2020, Alaska Airlines and ALC announced plans for the carrier to take 13 new MAX 9s from ALC while Alaska will sell ten Airbus A320s to ALC and lease them back for a short period of time.

Alaska Airlines Receives First Of 13 Boeing 737 MAX Jets From ALC
While Alaska’s Airbus fleet is relatively young, it adds costs in the form of a mixed fleet that the carrier is looking to get rid of. Photo: Alaska Airlines

The sale-and-leaseback of the Airbus A320s is a temporary measure designed to limit the crunch on Alaska’s fleet as it awaits more of its preferred aircraft: the Boeing 737 MAX. Alaska’s Airbus A320 fleet is relatively young, at around ten years old, which means they could still find life at another airline.

Alaska had been looking at ways to remove the Airbus A320 from its fleet while adding the 737 MAX without taking a significant hit on A320 impairments and paying a substantial sum for brand new aircraft. The leasing agreement with ALC, coming during a time of crisis, likely provided both parties with a win. When ALC gets the aircraft back, it will likely be able to find a new home for them with comparatively less difficulty than other used jets.

Alaska Airlines Receives First Of 13 Boeing 737 MAX Jets From ALC
The 737 MAX also is a higher gauge aircraft compared to the A320. Photo: Alaska Airlines

Alaska’s fleet renewal

Under the nose of some of Alaska’s aircraft, you can find the words “Proudly All Boeing.” This is where Alaska is aiming to be. Post-merger with Virgin America, the airline inherited the Airbus fleet.

While Alaska did take some new Airbus planes Virgin had on order, it has 30 Airbus A320neo aircraft purchase commitments – which are cancelable – and it does not have plans to take any more Airbus aircraft. It did not purchase any more Airbus jets since the merger.

Alaska Airlines Receives First Of 13 Boeing 737 MAX Jets From ALC
The one Airbus type that will stay in Alaska’s fleet for the foreseeable future is the A321neo. Photo: Vincenzo Pace | Simple Flying

The Airbus A319s are gone and the A320s will be gone by the end of 2023. However, Alaska still will not be at an all-Boeing fleet. It has 10 Airbus A321neos flying, and these planes are critical on some transcontinental routes where they offer more seating and better performance than a MAX in markets like Washington D.C. (DCA).

Keeping a fleet of 10 A321neos around is certainly not ideal, and it is an inefficiency Alaska wants to do without. It does not have the perfect exit strategy for these aircraft, nor does it necessarily have the right jet to replace them. Once Boeing presents Alaska with something to fit the bill, the story could change. Perhaps it could be the 737 MAX 10, but time will tell.

Source : Simple Flying More   

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-$5.9 Billion: AirAsia X’s Losses Increase Eightfold Year On Year

AirAsia X has booked a massive US$5.9 billion loss for the three months ending June 30, 2021. It…

-$5.9 Billion: AirAsia X’s Losses Increase Eightfold Year On Year

AirAsia X has booked a massive US$5.9 billion loss for the three months ending June 30, 2021. It is an eight-fold increase on the loss in the same quarter last year and the airline’s biggest quarterly loss to date.

AirAsia X has booked a US$5.9 billion loss over the three months to June 30. Photo: AirAsia

Provision to cover debt turbocharges the quarterly AirAsia X loss

Part of the AirAsia Group, AirAsia X is a low-cost long-haul airline based in Kuala Lumpur. The airline says in the stock exchange filing they’ve suffered extensively from the  COVID-19 fallout. AirAsia X has suspended the bulk of its scheduled flight operations since April 2020 and parked the majority of its fleet. In the three months to June 30, 2021, the airline recorded revenues of US$17.25 million.

An accounting provision to cover debt previously defaulted on turbo-charged AirAsia X’s quarterly loss.

“The Company has made a provision of RM23.8bil in the current quarter though it should be highlighted that the contractual liabilities for which the provision is made will be waived upon a successful completion of the proposed debt restructuring exercise,” AirAsia X said in a Bursa Malaysia stock exchange filing on Monday.

AirAsia-X-Quarterly-Loss
AirAsia X has a fleet of Airbus A330 aircraft, with almost all grounded. Photo: AirAsia

AirAsia X talks with creditors continue

The loss comes as the beleaguered airline attempts to negotiate with creditors in a long-running court-supervised restructuring program. Nearly 12 months ago, AirAsia X said it wanted to restructure $15.5 billion worth of debt, including a $5 billion-plus aircraft order with Airbus.

Creditors holding a minimum of 75% of the unsecured debts must approve any debt restructuring proposal for it to pass.

Recently, Malaysia’s AirAsia X Bhd, the listed company behind AirAsia X, said talks with creditors were progressing well and that it hopes to conclude them by the end of October. The airline has reached an agreement with several large creditors, including Honeywell International, Bridgestone Aircraft Tire Company, and Sky High I Leasing Company.

But AirAsia X is asking its many creditors to take a big haircut. Under the terms of the restructuring proposal, the airline wants to end up paying around only about 2% of its $15.5 billion debt – and that 2% repayment would get spread over five years at 2% interest.

If that sounds like a dud deal for creditors, 2% is better than nothing. With AirAsia X on the brink of going out of business, many think creditors will take what they can get.

AirAsia-X-Quarterly-Loss
AirAsia X has 78 A330s on order with Airbus. Photo: Airbus

Reality bites says AirAsia boss

When AirAsia X first proposed the deal, many creditors strenuously objected, including the largest creditor, Airbus. But 12 months down the track, many creditors are coming around.

“Reality bites,” said AirAsia Chief Executive Officer Tony Fernandes last year. “We are in unprecedented times. Should the airline wind up and you get 30 planes, what are you going to do with them? We can all put our heads together and try to save the situation.”

“Creditors, including lessors and Airbus, understandably don’t want to see the airline fall as they stand to lose a lot. The decision to work with AirAsia X to restructure is to salvage whatever they can,” Malaysia-based aviation consultant Shukor Yusof told Reuters.

AirAsia X confirms most creditors wanted the airline to proceed with its restructuring plans. Under the terms of the restructuring plan, talks with creditors must be finalized by next March when orders preventing creditors from suing AirAsia X expire.

Source : Simple Flying More   

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