Alaska Airlines agrees to buy 23 Boeing 737 MAX jets
The order is worth $2.96B
The Federal Aviation Administration has rescinded its grounding order for Boeing's 737 Max jet; FOX Business' Grady Trimble with more.
Alaska Airlines has agreed to buy 23 Boeing Co 737 MAX 9 jets, the companies said on Tuesday, confirming an Oct. 8 Reuters report that the U.S. planemaker was in talks with Alaska to stimulate demand for the jet’s comeback.
SOUTHWEST TO TAKE DELIVERY OF 35 737 MAX JETS THROUGH END OF 2021
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ALK | ALASKA AIR GROUP INC. | 53.96 | +1.08 | +2.04% |
| BA | THE BOEING CO. | 140.19 | +2.05 | +1.48% |
The order, worth some $2.96 billion at list prices before expected steep discounts, comes less than three weeks after European budget airline Ryanair also placed a lifeline order for 75 Boeing 737 MAX jets.
Boeing is battling to build momentum for the 737 MAX as its cash-cow jetliner re-enters commercial service following a 20-month safety ban triggered by fatal crashes.
CLICK HERE TO READ MORE ON FOX BUSINESS
“We like to keep the balance sheet strong so that in times like this we can be contrarian and make moves to fundamentally improve the competitive position of the company,” Alaska Airlines Chief Executive Brad Tilden told Reuters.
An Alaska Airlines 737 comes in for landing at Portland International Airport in Oregon on Feb. 24, 2018. (iStock)
Tilden declined to discuss the final price tag, or whether France-based Airbus had submitted a rival proposal.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The deal was expected to include significant discounts given the 737 MAX’s recent woes and plunging demand for airplanes during the coronavirus crisis, industry sources have said.
Even at a fraction of the MAX’s list price of $129 million, the deal could help Boeing to stem a cash hemorrhage caused by a stockpile of roughly 450 undelivered MAX jets.
SOUTHWEST CEO SAYS SOFTWARE ISSUES IN BOEING MODEL THAT CRASHED TWICE HAVE 'EASILY BEEN ADDRESSED'