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Alaska Air (ALK) Arm Leases 13 737-9 MAX Jets to Upgrade Fleet

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Alaska Air Group’s (ALK - Free Report) subsidiary Alaska Airlines announced plans to lease 13 new Boeing 737-9 MAX aircraft from Air Lease Corporation (AL - Free Report) as part of its fleet modernization efforts. The news comes close on the heels of Boeing receiving Federal Aviation Administration approval to fly the MAX aircraft again, which was grounded for 20 months following two deadly crashes killing 346 people. Both Alaska Air and Air Lease carry a Zacks Rank #3 (Hold).

Apart from leasing the Boeing 737-9 MAX aircraft, the airline will be selling 10 Airbus A320s to Air Lease. The Airbus A320s have been a part of the carrier’s fleet since the Virgin America acquisition in 2016.

Alaska Airlines will receive deliveries of the 13 737-9 MAX aircraft from fourth-quarter 2021 through 2022. Once the transaction closes, the airline plans to lease the A320s back from Air Lease for a short period of time.

Besides, the lease of 13 737-9 MAX aircraft, the carrier currently has 32 MAX aircraft on order with Boeing. Out of those 32, it expects to fly five by summer 2021. The airline is expected to begin operating the 737-9 MAX from March 2021.

The MAX aircraft help generate substantial cost savings as they are 20% more fuel efficient than the A320s. They also generate 20% less carbon emissions per seat compared to the A320s.

Key Picks

Some better-ranked stocks in the broader Transportation sector are Expeditors International of Washington (EXPD - Free Report) and FedEx Corporation (FDX - Free Report) . While FedEx sports a Zacks Rank #1 (Strong Buy), Expeditors carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Expeditors and FedEx have rallied more than 13% and 89% respectively so far this year.

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