Alaska Air Group (NYSE: ALK) on Tuesday firmed up the order with Boeing Co (NYSE: BA) to buy an additional 23 737-9 MAX jet with the option to buy 15 more, a deal the two companies initially announced in December as a commitment, further lifting confidence for the struggling planemaker as it limps back to normalcy after facing a global ban and decimated demand for air travel during the coronavirus pandemic.
What Happened: Seattle-based Alaska Airlines, the fifth-largest U.S. passenger carrier, laid out plans to buy an additional 23 737-9 MAX aircraft between 2023 and 2024, and the option to buy 15 more with delivery between 2023 and 2026, under the amended agreement.
In a separate statement, Boeing said it has finally firmed up the order for 23 737-9 airplanes and 15 options with Alaska Airline which was announced in December as a commitment. The order is estimated to be worth about $2.96 billion at list price and will bring the carrier’s total 737 MAX orders and options to 120 airplanes.
Boeing said Alaska Airlines received its first 737-9, the smallest MAX variant, in January and began revenue service on March 1. Its second 737-9 entered service on March 18, with two additional 737-9s scheduled to begin revenue service next week.
There are 29 unfulfilled 737 MAX orders for Alaska, as of February 28, according to the Boeing website.
Why It Matters: The deal comes a day after the planemaker said Southwest Airlines Co (NYSE: LUV) had secured 100 new 737 MAX-7 jet orders — its biggest order since the planes were ungrounded.
Chicago-headquartered Boeing is making full efforts to win back and retain customers after its bestselling plane 737 MAX resumes commercial flying after a 20-month safety ban triggered by fatal crashes.
Price Action: Alaska Air shares closed 3.6% higher at $69.94, Southwest shares closed 1.56% higher at $61.91, and those of Boeing closed 0.59% higher at $252.0, on Tuesday.
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