Alaska Always Wanted to Simplify Its Fleet, Now It Has Another Reason

Alaska Airlines

Alaska Airlines has long loved to stretch the truth about its fleet simplicity, but only just a bit. The Virgin America merger made that a lot harder, but now, the airline is making a big move, ditching 3 aircraft types and trying to get back to where it once was. This was already something Alaska had wanted to do, but now it has another reason to make it happen… the pilot shortage.

Alaska mainline had been 737-only since the MD-80s were retired in 2008 and for that reason, Alaska could wear the “Proudly All Boeing” sticker under its cockpit windows. Being a Seattle-based company in a land where Boeing used to be based and still builds a lot of airplanes — some of which it can actually deliver — makes it worth it to show some solidarity with the locals.

Horizon never operated Boeing aircraft, but as a wholly-owned subsidiary it is technically a separate airline. Horizon had built up a large fleet of Q400 turboprops (built by Bombardier) and then later added Embraer 175s (built by, well, Embraer). After an experiment with CRJ-700s operated by SkyWest (after Horizon had also tried that path long before), Alaska moved on to have the airline fly only Embraer 175s under the Alaska brand.

This was all well and good, but then Virgin America showed up. That airline was all-Airbus, and this fleet wasn’t something Alaska could just easily replace. In the merger, Alaska inherited 10 A319s, 53 A320s, 10 A321neos, and an order for 30 A320neos. It slowly started to whittle those down, but there wasn’t a clear and easy path to go back to being all Boeing then.

Toward the beginning of the pandemic, Alaska created a new plan. Besides shedding its orders, the A319s were too small and would be retired right away. The owned A320s would be retired as well, but those under lease would stick around until they expired. Even with that, this wasn’t going to be all-Boeing…

Alaska’s problem was two-fold. One, it needed a lot of airplanes and two, it needed airplanes that could perform the required missions.

The A321neos are rock stars, and Alaska could not find a better option from Boeing. With 190 seats, those airplanes could help Alaska maximize capacity at slot-restricted airports like New York/JFK and most importantly Washington/National where the short runway makes it hard to get big airplanes off with a full load.

Earlier this month, Alaska made its first move to rectify that problem. The airline moved its 737 MAX 9 orderbook around to shift away from only flying the MAX 9 to now include the MAX 10 for high capacity and the MAX 8 to replace A320s in longer-haul or mid-size markets that couldn’t support a larger airplane.

With this new rejiggered order, Alaska felt emboldened to finally pull the plug. The airline has now announced that the A320s will be gone next year as planned, but now even the A321neos will be gone by the end of 2023.

This is great news for Alaska, because apparently the leases Virgin America negotiated were pretty terrible. Now Alaska can get rid of those once and for all. It will also, in a surprise, ditch the Q400s from Horizon’s fleet. But I’ll talk more about that later.

Here is a look at Alaska’s new plan. Note that I’m guessing the 150-162 seat number is wrong for YE 2024 because there may very well be 737 MAX 8s delivered that year, but I couldn’t see 2024 MAX 8 delivery dates in the Cirium data, if there are any. Also, note that these numbers differ very slightly from Alaska’s recent investor presentation, but this is how my math added up.

Alaska Aircraft Planned by Seat Capacity by Year

Data via Alaska and Cirium

What you see here is the result of Boeing delivering MAXs like crazy. The numbers are growing, and by the end of 2023, Alaska will have more mainline aircraft than it had at the start of 2023, even with the Airbuses all going away.

But will Alaska really be able to serve all the markets it wants? I asked the airline for comment and was told this:

After the A321, the largest airplane we can now operate at DCA is the 737-9. It carries the same number of passengers as the 737-900ER more efficiently. The 737-10 will allow us to carry more passengers per departure, and while we won’t know the exact runway requirements of the 737-10 until it is certified, we expect to be able to operate it from both DCA and JFK.

If the MAX 10 can really handle DCA to the west coast with a full load, then the problem is solved. Those airplanes won’t arrive until 2024, so there will be a capacity hit during the transition, but Alaska can go back to saying it is Proudly All Boeing and not have to put an asterisk next to the statement… except for those regional aircraft.

The move on the regional side is a different story. Horizon had built a backbone with the Q400 and had been planning on keeping that fleet flying for a long time, far longer than was previously expected. Now it will make a quick exit.

Though Horizon and SkyWest are both adding Embraer 175s, there is a big hit to capacity. The regional fleet will still have 12 fewer aircraft at the end of 2023 than it had in 2021. This, of course, is easily remedied with an order for a few more. I wouldn’t be surprised to see that happen, and it really shouldn’t be hard to get more airplanes in time.

Alaska tells me, “we aren’t pulling out of any airports we currently serve due to the change,” so there don’t seem to be performance concerns about the jet over the prop. I do remember that Santa Rosa used to only be workable with the Q400 but the runway was lengthened so that’s not an issue anymore.

The Q400s were just cheaper airplanes that did a great job of flying shorter distances. So why would Alaska want to get rid of them? In this case, my assumption is that it’s a pilot problem. Regionals are struggling to find enough pilots to fly their schedules, and having two fleets makes that even harder. It significantly increases the training burden and pulls pilots out of the schedule when it’s time for them to upgrade.

I am sure this is putting stress on Horizon right now. Going to an all Embraer 175 fleet takes all that away. Any pilot in the company can fly any airplane, and that is a hugely important. I have to imagine that this was the driving force behind making the change, and it’s a sensible move in a situation like this.

So now, we have a new Alaska fleet that will be all Boeing… and Embraer. But it should make life easier for the airline in many ways, and that will be a welcome change. I’d recommend scrolling through the airline’s recent investor presentation to learn more about how Alaska is firing on all cylinders right now. It’s a good presentation from a company that is running well. Can’t say that about this industry too often these days.

52 comments on “Alaska Always Wanted to Simplify Its Fleet, Now It Has Another Reason

  1. CF, What makes Alaska so smitten with Boeing? Do you think that they considered going all-Airbus? I will never fly on a 737. Too cramped and noisy compared to an Airbus 320. And I don’t have a high opinion of any plane rolling off Boeing’s production line these days. Comfort-wise, I will always favor an Airbus plane over a Boeing plane. That’s a big change from 30 years ago when Boeing was the unquestionable best.

    1. Angry Bob – Alaska and Boeing are two peas in a pod up in Seattle. They have a good relationship, and I can’t imagine Airbus was ever in the running.

      As an aside, I honestly don’t understand anyone who will “never fly” on this or that. Just flew on my first MAX and it’s nice and quiet. The seats are a bit narrower, but I can’t see it making enough of a difference.

      1. CF, I’m not anti-Boeing. I love the 787. The fuselage curve of 737 is inward and narrower than the curve of Airbus. For FC pax the 737 limits the bags that you can store. And Airbuses seem quieter. Just my opinion but I was curious if a CF survey was ever down (Boeing versus Airbus).

        1. I have yet to fly the A220, but one airliner that I really liked flying (which is sadly no longer in service much anymore, at least in terms of domestic US pax service) is the Mad Dog.

      2. In theory, Alaska has to at least consider Airbus when they make major orders, otherwise management could be sued by dissident shareholders for breach of responsibility.

        But as a practical matter, the “simplicity” argument goes a long way, and their relationship with Boeing lets them put an intangible “thumb on the scale” from a marketing perspective that makes soliciting bids from Airbus just a mere formality, unless Airbus were to come back with a price so low they’d risk charges of predatory pricing. And Airbus has plenty of companies out there looking for A320 family planes right now.

        As for “never flying” a given type, most of the time it’s more a matter of the way the planes are configured, particularly the lavatories. All things being equal, I prefer an A320 family plane over a 737, but it’s not a big enough difference to sway my choice. I did avoid the MAX series for a while until the problems with the MCAS were identified.

    2. I’m curious: how do you completely avoid flying 737s in practice? Do you only fly JetBlue, Frontier, and Spirit? Because if you fly Southwest, you’re guaranteed a 737, and I don’t think you can count on an Airbus on any route on any of the big three. Sure, you can book flights that show as Airbii at booking, but schedule changes and/or cancellations can easily make you wind up on a 737 on nearly any mainline narrowbody route, and I highly doubt the airlines accept “I don’t fly Boeing” as a reason to waive change fees or fare differences.

      Sounds incredibly expensive and inconvenient. (Do you really mean “I avoid Boeing when practical”? Even that I, like cranky, don’t get. I am tall and skinny (not broad-shouldered), and I don’t think I could tell from the seat if I were on a Boeing or Airbus. The extra inch of width just isn’t a big difference to me personally.)

      1. I usually fly Delta, occasionally AA in the U.S. and Air Canada up north. When I am looking for a flight I look at the equipment (unless its a short duration). I don’t know why the Airbuses are quieter but they are. When I board a flight I can see the additional passenger space which means more comfort. And I am not anti-Boeing. As I said earlier I love the 787. It’s a great plane.

  2. Makes one wonder why AS bought VX in the first place. If VX had merged with B6, things would look quite different with both their networks & fleet types. AS would have maintained Boeing planes & B6 would have not only gained more Airbus jets, they would also would have gained a larger presence on the west coast without watering down their LGB operations at the time.

    1. I think you answered your own question – AS didn’t want B6 to get a major intra-West Coast presence that Virgin would have offered. They wanted some of Virgin’s routes as well, but never underestimate the drive to buy something just to prevent someone else from having it.

      1. Yes, it is very clear that this was about removing one west coast competitor instead of strengthening one. AS has an appreciably stronger position in California than they did before the merger. I don’t think they could have organically grown to the point where they have the traffic to support this larger Boeing fleet if jetBlue were operating the vestiges of the Virgin America network in California.

  3. I bet Delta would like those low-time A-321NEOs that Alaska is divesting. I will miss the Q-400. What a great, low-operating cost airplane. Would be perfect for Caribbean flying from SJU. Or for Silver. As I recollect, Alaska’s introduction of the Q-400 hastened Southwest’s northwest retreat.

    1. Silver’s converting to an all-ATR fleet (only 4 Saabs left if Wikipedia is current), so I doubt they’d want the added complexity.

    2. I read that Alaska’s A321neos use LEAP engines. Delta’s use P&W PW1100Gs. American’s A321neos use LEAP engines, so a swap between American and Alaska would be more feasible. That is if the leases can be worked out. American has some 737-800s it’s taking out of storage that Alaska could use temporarily until its new aircraft are delivered.

    3. The biggest factor in WN’s retreat was DL flooding the zone in SEA ~2014 to drive fares into the ground. United closed its base in SEA, WN seriously shrunk its operation. AS maintained a roughly similar SEA market share percentage.

      1. Yes, I think Delta’s growth was a factor, but WN went from 5 roundtrips a day on GEG-SEA down to ZERO after Horizon came on the route with the Q-400. Delta did not fly GEG-SEA at that time. In short haul, the Q-400 was only a few minutes slower than a 737 and much lower operating costs. Southwest acquiesced remarkably quickly.

        1. I’m not sure what year you’re referencing, but WN was flying GEG-SEA from *at least* 2008-2013, when 10 Q400s per day were flying that route, which they’d been doing ever since they were acquired in 2001. Maybe WN pulled out in 2002 but … came back?

  4. Cranky, does Alaska own any of the SkyWest E175s? With SkyWest having a severe pilot shortage and Horizon soon to have a surplus of ex-Q pilots, coupled with Horizon crew’s long standing ire at having their niche outsourced being cranked to 11, I wonder if a few frames might move SkyWest to Horizon?

    What does this do to the number of flights per day Alaska can offer? Those Qs are busy airplanes, and even if they keep every market they’re still losing something like 250ish flights per day I’d guess.

    1. Eric – Alaska owns 30 E75s and leases 32. Horizon operates 30 and SkyWest 32, so I’m assuming those aren’t mixed own/lease between the two but I don’t know for sure.

      As for flights, it’s hard to know for sure. I’m sure they’ll make it work.

      1. Probably about as easy for Alaska to pick up used E75s as it is for us to find a used Camry.

          1. I know a bunch of former Q400 pilots that might have the time and inclination to get E75 certification

            1. While E75 pilots flow to aaS and other majors because everyone is desperate for new pilots.

    2. There won’t be a surplus of Q pilots. The reason the retirement is being expedited is the lack of pilots. And this news will just send the remaining pilots running for the hills.

  5. This fleet simplification and retirement of the Q400’s is just one of many things happening in a long list of preparations for a coming merger. Either AA or SWA. Hard to say at this point.

    1. Why? AA could certainly absorb a mixed Boeing/Airbus fleet, since that’s what they already operate. ALK’s financial position remains fairly strong, doesn’t it?

      Rumors of AS being swallowed up by one of the bigger airlines have been floating for decades. I don’t see why this is the moment there’s finally any truth to them. Not clear at all that AS needs to be swallowed up to be competitive, and even less clear that such a merger would pass regulatory scrutiny (even if they waited for the next Republican DOJ).

      1. Alaska might be the acquiror, not the target.

        Remember it was America West that acquired USAir and US Airways (same crappy airline but now with a space and four more letters!) that acquired American.

        1. I can see Alaska acquiring, say, AA, touting enormous benefits and a revolutionary new way of doing business, and then after their first staffing-related ops meltdown promptly announce a single 737 MAX fleet, ending all routes outside of North America and using the money to build a fourth runway at SEA. This is all that Alaska knows how to do: defend SEA and sell credit cards. They have no ideas on how to do anything else and they have not done anything else for 20 years.

        2. Sure, but either way, the point that an all-Boeing/Embraer fleet is in preparation for a merger with AA, DL, or UA doesn’t make much sense. If AS acquires AA, AS’s Airbuses would fit in just fine to the combined fleet.

          There are lots of other reasons I don’t think an AS merger with any of the big four is likely (no matter who’s doing the buying), but a mixed Airbus/Boeing fleet isn’t one of them.

  6. ALK’s investor package is quite convincing, especially the page on debt to total capital, which highlights they haven’t diluted their shares with more shares being issued. Time will tell. Meantime the AA picture in the slide is downright scary at 120%. Yikees!!!!

  7. This is the right move for Alaska’s fleet, but I find it a bit obnoxious for it to still advertise itself as being “proudly all-Boeing”.

    Good to know that your fleet (except the E175) is exclusively from a manufacturer that has had its last 2 major new products in the past decade grounded due to serious safety issues, and is shifting production away from the Pacific Northwest because it doesn’t want to deal with labor there. Boeing no longer carries the image it once did in Seattle.

    Hopefully the A321neos can go somewhere where their capability can be used more cost-effectively.

    1. AS may be proudly all Boeing (except for all the non-Boeing planes they own), but Boeing isn’t proudly all PNW… and hasn’t been in a long time.

      UA is now the hometown airline for Boeing.

  8. As always with Alaska, there is a little bit of “too cute by half.” Alaska is recovering more quickly than competitors because – duh – it doesn’t do long-haul international flying, which is nowhere near recovery levels yet.

    But beyond that, the shiny, fancy shareholder deck does not address something nearly entirely out of Alaska’s control: SEA.

    SEA itself is a growth-limiting issue. Pre-pandemic, that airport was absolutely bursting at the seams, almost unable to handle the published schedule. The summers of 2018 and 2019 were unmitigated disasters from a customer experience perspective, mostly stemming from flow issues on departures and arrivals. You can add all the gates in the world to SEA (and Alaska is touting gate growth in their deck), but you can not eliminate the ceiling of airfield capacity at SEA. That’s not in Alaska’s control, and it has not changed appreciably in any way in the last three years.

    Additionally, Alaska has a, shall we say, lackluster history with “growth” outside of its core PNW markets. Alaska has a reliable pattern of attempting to grow in places like, say, California, and getting absolutely annihilated by competitors. This is consistently followed up by a retreat to SEA and a “defend the fortress” mentality. This is what Alaska does best and does well: defending SEA. They are quite proud of this. But, they have nothing, other than filling the Hawaii hole left by Aloha Air, to be proud of in the “growth” category. They even bought an entire airline (!) to facilitate “growth” and, at the first hint of trouble, shut down the VX routes and retreated back to SEA. This is what they do. In the past few years, they’ve reliably blamed the VX merger for issues. That’s not an option any longer.

    The Cranky Flier, himself, noted this behavior in his article from August, 2019 (https://crankyflier.com/2019/08/29/alaska-turns-its-california-compass-to-point-north/). For 30 years, Alaska has made its money flying north and south along the West Coast, with dabbling into trans-con flying but only out of fortress hubs.

    Alaska is about to buy a *lot* of new planes. How much do you want to bet they’ll run into the same problems they always run into with a too-full schedule into at-capacity markets with competitors eager and ready to undercut them? I see nothing in their presentation or in their quotes to acknowledge a new strategy that will somehow have a different result than their consistent past failures.

    P.S. If I lived in EAT, HLN, GTF, YKM, RDD or any other airport with a small population and a tiny runway, I’d start joining some competitors’ credit card plans. There are little baby routes like SEA-EAT that “kind-of” make sense with a Q400 but start getting stupid for an E175 to fly.

    1. Mainly flying out of YLW and EAT on AS, I’m pretty nervous about this. I’m glad to hear AS say they’re not cutting any existing cities, but that promise is worth the paper it’s written on.

      Of course, EAT and YKM-based flyers (and YLW-based flyers who want an American airline) have no options if AS/QX drop the routes. On paper, EAT-SEA isn’t far, but driving over Stevens or Snoqualmie Pass in the winter is no picnic, and I much prefer to fly. There are plenty of times when flights get through no problem but the passes are closed. (The reverse does happen, but less often.)

      I don’t *think* runway length is an issue. Both EAT and YKM have 7000 ft runways, and Embraer lists MTOW runway for the AR version (dunno if that’s what QX has) of 7400 feet. An E175 doesn’t need anywhere near a full fuel load to fly EAT-SEA or YKM-SEA. YLW has numerous mainline flights on Canadian airlines on its 8900 foot runway, so definitely not an issue. The other airports you list have even longer runways.

      1. The catch-22 is that, often when the passes are bad, EAT and YKM are fogged in, too. I don’t know if AAG has given CAT-III to the entire E175 fleet (I recall there may be issues with SkyWest on this).

        But even beyond the weather, I suppose runway size isn’t really the biggest factor as compared to the economics of the flights. The Q400 would drink (exaggerating) two or three gallons of gas between SEA-EAT; it’s one of the most fuel-efficient passenger carriers for short routes out there. The E175 just can’t match that performance, and fuel is not particularly affordable. I can see Alaska pulling the plug on some of these routes because they’re just not making enough off of them, coupled with a smaller and less flexible regional operation, in general.

        1. Yeah, that’s my concern about the short flights. The Q400 is a champ on those flights. From a passenger perspective, though the E175 is in my view the nicest narrowbody in the sky, I find the Q400 perfectly comfortable for short flights and love the under-wing, low altitude views from the Q400 on my regular routes (SEA-EAT and SEA-YLW), which are two of the most spectacular flights on the planet.

          Yes, there is weather that closes both the passes and the airports, but my experience at EAT is that it’s pretty common for flights to operate fine while the passes are closed or difficult and slow to drive.

          1. The biggest problem from the change for smaller airports and some routes is that they simply will have significantly fewer planes.

        2. In looking up Alaska’s flying mix, one of the fact sheets states that its Pacific Northwest feeder operations represent about 3% of the airline’s total capacity. The flights you mention are probably a small percentage of that total. I’m guessing that the slightly higher fuel burn of an E-175 versus a Q-400 on these short routes is largely offset by the efficiencies of a common fleet.

    2. Apparently becoming the number 2 airline behind WN at SJC and SAN is “defending SEA”. Who knew?

    3. Alaska does have a way of making a few intra-California routes work. I grew up in Fresno and never thought there was enough demand for FAT-SAN, but AS seems to make it work.

      (And I’d overlooked EAT. We need EAT-FAT service…or even better yet EAT-PIE-FAT. Yes, I’m bored at work this morning.)

    1. I will miss them too. Growing up in the PNW, I spent a lot of time on those QX Q400’s (and even more time on the old QX Dash 8 100/200s and Metro III’s). They’re not as roomy as the E175’s, but I love the rear door boarding, that makes the back of the plane much more desirable. Takeoffs are fun too… the Q gets in the air in a hurry!

  9. Horizon spent a lot of money on new paint and interiors for the Q400 fleet last year, so killing off a fleet of very efficient airplanes in the midst of spiking fuel prices was probably an attempt to boost the Alaska stock price and cover for the fact Horizon can’t recruit new pilots more than anything.

    There is a staffing issue at Horizon, but it’s entirely self inflicted. Alaska management got Horizon pilots to sign an 8 year context back in 2016 (which lead to Horizon having no pilots in 2017), and that contract is no longer competitive with what other regional airlines offer, so new pilots are justifiably going to other regionals, and existing ones are getting out as soon as they can.

    Alaska is suffering a similar problem, since many of the pilots going from Horizon to Alaska are immediately bailing for Delta or Southwest, since Alaska is no longer the “destination” airline it used to be, but their management doesn’t understand that yet.

  10. CF, the bit you missed from your analysis of discontinuing the Q400s is they don’t line up with the rest of the AS product. Excluding the Q400s, every Alaska plane has WiFi, onboard streaming entertainment, seat back power plugs, and first class. The Q400s have none of that. This makes the Q400 an outlier from a hard product perspective.

    It also aligns into the reason why Alaska got rid of the Horizon brand and didn’t introduce an Express/Connection/Eagle brand. Yes, they put the operating airline in the livery a little larger than legally required, but the Q400, 737, A320, and E175 all have the same livery.

    1. Nick – It’s true, but the Q400s don’t do a ton of long flying anymore.
      This month they do 7 routes of more than 500 miles whereas if you go back to, say, 2014, it was 17. So the shrinking of that has helped to not have the product be as much of an issue. Plus, free beer and wine! But I do hear what you’re saying. I think they would have had a longer term place in the fleet for shorter haul hops if not for the pilot issue.

    1. The deal to buy Embraer wouldn’t have changed the status of the E2 in the US. It’s against most of the mainline carrier’s scope clauses. So it doesn’t matter who sells it needs to be flown by mainline airlines, which means it won’t be. That means there is no support for it in the US, so if AS buys it they have to setup their own support, which is expensive.

      Sent from my computer that moonlights as a phone.

  11. Well the 100’s of 787’s to be flown don’t seem to be mentioned. Are we just looking at intra-continental? The exciting part are the international operations openning E. Asia and Europe to the Americas. Now we can have ease and simplicity to go global.

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