To accomplish the transition, Alaska now anticipates taking delivery of 39 737-800s between 2006 and 2008, including the two aircraft that have already been delivered in 2006. In addition to these airplanes, Alaska has firm commitments for 13 aircraft, options for 24 and purchase rights for 27 in 2009 and beyond.
"This decision represents a major milestone in our transformation and moves us significantly along the path toward becoming an undisputed leader in our industry. Having a common fleet and growing with next-generation, fuel- efficient Boeing 737s will make a major difference in our operating costs, fleet reliability and the onboard experience for our customers," said Bill Ayer, Alaska's chairman and chief executive officer. "This move represents a significant upfront investment and will continue our momentum toward sustained profitability, growth and long-term job security and career opportunities for our employees."
The plan to retire the airline's 26 MD-80 aircraft by the end of 2008 will require an investment of approximately $750 million. It is expected to save more than $115 million per year in operating expenses once the transition is complete, primarily by lowering costs for fuel, maintenance, training and crew scheduling.
"This level of investment requires that we continue our transformation and keep delivering on our cost goals and profit objectives," Ayer said. "Our employees are a crucial part of that equation, and we need to continue working together to provide optimum value for our customers."
The acceleration of the conversion plan, when combined with the purchase of new aircraft, will expand Alaska's fleet to 114 aircraft from 110 at the start of 2006, and is expected to increase available seat miles (ASMs or the number of seats available per mile flown) by 18 percent by the end of 2008. With an average fleet age of eight years following the transition, Alaska will have one of the youngest fleets in the industry.
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This move to an all Boeing 737 fleet will help bring down Alaska's fleet age. However Alaska has one of the lower fleet ages in the US. Only JetBlue, Continental, United, Southwest, and ATA bet Alaska. But this move will also keep maintaince costs down. Training for mechanics will be significantly lower. Also keeping spare parts around for the same fleet will result in a lower cost rather than having to keep spare parts around for various other types of aircraft.
Alaska did not say whether they will be replacing or dropping their other aircraft, the Bombardier CRJ-700, Bombardier Q400, or their Bombardier Q200, which they use to fly in and out of the smaller Alaskaian cities.
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