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Alaska Air (ALK) Arm Upsizes Boeing 737 MAX Order by 23

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Alaska Air Group’s (ALK - Free Report) subsidiary Alaska Airlines has boosted its Boeing 737 MAX orders. It will now purchase 23 more 737-9 airplanes, adding to its previous order to lease 13 new Boeing 737-9 MAX aircraft. The move is a part of Alaska Airlines’ fleet modernization efforts.

Following a 20-month ban after two fatal air crashes caused the death of 346 people, the Boeing 737 MAX aircraft received Federal Aviation Administration’s approval to fly again in November.

The new agreement will add 23 firm orders for the 737-9 and more options for future purchases. This deal brings Alaska Airlines’ 737 MAX orders and options to a total of 120 jets.

Last month, the carrier 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 airline also stated that it would sell 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.

With the expanded deal to buy 23 more 737-9 airplanes, Alaska Airlines moves toward an all-Boeing mainline fleet. The MAX aircraft help generate substantial cost savings as they are 20% more fuel efficient than the A320s it intends to replace. They also generate 20% less carbon emissions per seat compared to the A320s.

While Alaska Air carries a Zacks Rank #5 (Strong Sell), Air Lease carries a Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks in the broader Transportation sector are Landstar System, Inc. (LSTR - Free Report) and United Parcel Service, Inc. (UPS - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Landstar and UPS have gained more than 23% and 59% in the last six months, respectively.

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