Alaska Airlines agrees to buy 23 Boeing 737 MAX jets

The order is worth $2.96B

Alaska Airlines has agreed to buy 23 Boeing Co 737 MAX 9 jets, the companies said on Tuesday, confirming an Oct. 8 Reuters report that the U.S. planemaker was in talks with Alaska to stimulate demand for the jet’s comeback.

SOUTHWEST TO TAKE DELIVERY OF 35 737 MAX JETS THROUGH END OF 2021

Ticker Security Last Change Change %
ALK ALASKA AIR GROUP, INC. 57.77 +0.25 +0.43%
BA THE BOEING CO. 217.04 -0.40 -0.18%

The order, worth some $2.96 billion at list prices before expected steep discounts, comes less than three weeks after European budget airline Ryanair also placed a lifeline order for 75 Boeing 737 MAX jets.

Boeing is battling to build momentum for the 737 MAX as its cash-cow jetliner re-enters commercial service following a 20-month safety ban triggered by fatal crashes.

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“We like to keep the balance sheet strong so that in times like this we can be contrarian and make moves to fundamentally improve the competitive position of the company,” Alaska Airlines Chief Executive Brad Tilden told Reuters.

An Alaska Airlines 737 comes in for landing at Portland International Airport in Oregon on Feb. 24, 2018. (iStock)

Tilden declined to discuss the final price tag, or whether France-based Airbus had submitted a rival proposal.

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The deal was expected to include significant discounts given the 737 MAX’s recent woes and plunging demand for airplanes during the coronavirus crisis, industry sources have said.

Even at a fraction of the MAX’s list price of $129 million, the deal could help Boeing to stem a cash hemorrhage caused by a stockpile of roughly 450 undelivered MAX jets.

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