Allegiant Air adds new Boeing aircraft to its fleet

The low-cost American airline Allegiant Air has exercised options on six additional Boeing 737-8 aircraft, which are expected to be delivered in 2028. This brings its total firm commitments under its contract with Boeing to 56 aircraft, with the possibility of acquiring 74 more.

Firm commitments and delivery status

Publicly announced on October 23, the agreement involves 737-8 aircraft scheduled for delivery in 2028. Of the 56 firm aircraft, 22 had already been delivered by October 23, leaving 34 more to be received under this agreement.

Shift in fleet strategy

This new batch of aircraft marks a shift in Allegiant’s fleet policy. At the time of the initial contract announcement in January 2022, the airline operated 108 used Airbus A319 and A320 aircraft. Its strategy was centered on acquiring used planes to reduce fixed costs, and the new Boeing aircraft were meant to modernize part of its fleet while supporting its growth.

Evolution of the contract terms

The initial agreement included 50 firm aircraft, split between the 737-7 and the 737-8-200, a high-capacity version of the MAX 8, along with 50 options. The scope of the options has since changed, and the 74 remaining options should not be seen as just the leftover from the 2022 options. Maurice J. Gallagher Jr., who was then CEO of Allegiant, mentioned in 2022 that these aircraft were intended to offer more flexibility in increasing capacity and retiring older aircraft.

Delivery schedule adjustments

The delivery of the Boeing aircraft did not follow the original schedule. Allegiant initially planned to receive its first MAX in 2023, followed by the remaining 50 firm aircraft in 2024 and 2025. However, its first 737-8-200 was finally delivered in September 2024 and entered commercial service in October of that year.

Amended delivery timeline

An amendment signed on November 14, 2024, reduced the number of deliveries scheduled for 2024 and 2025 and postponed the delivery of the 50 aircraft from the original order to the end of 2027. The six aircraft now expected in 2028 extend this acquisition program. Allegiant mentioned in its regulatory filing that the agreement included “other benefits and considerations related to the 2024 delivery delays as well as the deferred schedule until 2027.”

Economic and operational benefits

Allegiant’s interest in the new Boeing aircraft is primarily economic and operational. At the time of the initial order, the airline noted that the new planes would consume about 20% less fuel than its older Airbus A320 models and offer more seats. The Boeing aircraft are equipped with LEAP-1B engines from CFM International. To support their introduction, Allegiant also announced an exclusive 12-year maintenance contract with the engine manufacturer. The program aims to replace aging aircraft and provide additional capacity to support its business strategy, which focuses on non-stop flights between smaller American cities and leisure destinations.