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Alaska Air (ALK) Arm Aims to Grow Fleet As Travel Demand Rises

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Alaska Air Group’s (ALK - Free Report) subsidiary, Alaska Airlines, announced plans to increase its fleet size on expectations of recovery in air-travel demand as more Americans get vaccinated. Simultaneously, it revealed plans to begin a nonstop service to Belize City, Belize, to cater to leisure travel demand. Routes and schedules for this service from the West Coast will be announced in early June when ticket sales begin.

Alaska Airlines stated that it “expects domestic travel to return to pre-COVID levels by the summer of 2022, which will require more aircraft across Air Group.” To this end, the airline will add 17 new Embraer 175 jets to the regional fleet in 2022 and 2023, out of which nine will be operated by Horizon Air and eight by SkyWest. With this addition, Alaska Air’s regional fleet will grow to 111 aircraft (71 at Horizon Air and 40 at SkyWest). Out of Horizon Air’s nine E175 aircraft, five are scheduled for delivery in 2022 and four in 2023. Meanwhile, eight of SkyWest’s aircraft are expected to be delivered in 2020.

Further, as part of a previously announced agreement with The Boeing Company (BA - Free Report) in December 2020 to acquire 68 737-9 MAX aircraft between 2021 to 2024, Alaska Airlines is ordering 13 Boeing 737-9 MAX aircraft. Nine aircraft will be delivered in 2023 and four in 2024.

Alaska Airlines is not the only U.S. airline increasing its fleet size to prepare for the anticipated recovery in travel demand. In March, Southwest Airlines (LUV - Free Report) had reached an agreement with Boeing for an additional 100 737 MAX aircraft, out of which the first 30 are expected to be delivered in 2022. Earlier, United Airlines (UAL - Free Report) had placed an order for 25 additional Boeing 737 MAX planes and prescheduled delivery of some other orders in hopes of acceleration in travel-demand recovery.

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