Boeing Gets More 737 MAX Orders From Alaska Airlines Over December Commitment

Alaska Air Group ALK on Tuesday firmed up the order with Boeing Co BA to buy an additional 23 737-9 MAX jet with the option to buy 15 more, a deal the two companies initially announced in December as a commitment, further lifting confidence for the struggling planemaker as it limps back to normalcy after facing a global ban and decimated demand for air travel during the coronavirus pandemic.

What Happened: Seattle-based Alaska Airlines, the fifth-largest U.S. passenger carrier, laid out plans to buy an additional 23 737-9 MAX aircraft between 2023 and 2024, and the option to buy 15 more with delivery between 2023 and 2026, under the amended agreement.

In a separate statement, Boeing said it has finally firmed up the order for 23 737-9 airplanes and 15 options with Alaska Airline which was announced in December as a commitment. The order is estimated to be worth about $2.96 billion at list price and will bring the carrier’s total 737 MAX orders and options to 120 airplanes. 

Boeing said Alaska Airlines received its first 737-9, the smallest MAX variant, in January and began revenue service on March 1. Its second 737-9 entered service on March 18, with two additional 737-9s scheduled to begin revenue service next week. 

There are 29 unfulfilled 737 MAX orders for Alaska, as of February 28, according to the Boeing website.

Why It Matters: The deal comes a day after the planemaker said Southwest Airlines Co LUV had secured 100 new 737 MAX-7 jet orders — its biggest order since the planes were ungrounded. 

Chicago-headquartered Boeing is making full efforts to win back and retain customers after its bestselling plane 737 MAX resumes commercial flying after a 20-month safety ban triggered by fatal crashes. 

Price Action: Alaska Air shares closed 3.6% higher at $69.94, Southwest shares closed 1.56% higher at $61.91, and those of Boeing closed 0.59% higher at $252.0, on Tuesday.