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Allegiant Air’s MD-80 Plans Depend On Finding A320s

As the fleet becomes increasingly less reliable, Allegiant Air wants to retire all of its MD-80s by 2020, if not sooner, but its plans will depend on how quickly it can source used Airbus A319s and A320s, executives said in a briefing at the carrier’s headquarters.

LAS VEGAS—As the fleet becomes increasingly less reliable, Allegiant Air wants to retire all of its MD-80s by 2020, if not sooner, but its plans will depend on how quickly it can source used Airbus A319s and A320s, executives said in a briefing at the carrier’s headquarters. 

 

At one point, Allegiant flew 59 MD-80s. It now has 50 and  plans to retire one later in April so it can use its parts on other jets. As Allegiant retires more of the aircraft, it expects to use most for parts.

Allegiant is known for its low aircraft utilization—it flew each aircraft as few as 5 hr. per day in January. Even so, maintaining the MD-80s—many of which formerly flew for SAS Scandinavian Airlines—has been a challenge. This is especially the case in outstations, where Allegiant cannot always easily find mechanics who can fix them. “Every year that the MD-80 gets a little bit older, we are going to be challenged by that aircraft,” Chief Operating Officer Jude Bricker said. 

Sourcing parts also has “become a bit more challenging as time has gone on,” said Tom Doxey, vice president for fleet and corporate finance. “Whatever the OEM is, their focus is going to be on newer technology. We need to make sure we are reminding folks not to forget about us.”

Long-term, Allegiant expects to be an all-A320-family airline. It now has 11 A319s and 16 A320s, and it has already committed to adding 23 more Airbus narrowbodies by 2018. 

But before it settles on a retirement date for the last MD-80, Allegiant must find more used A319/A320s. The carrier has said it will retire its final five Boeing 757s by early 2018, so needs to acquire more than 30 Airbus narrowbodies before  it can stop flying MD-80s and maintain its current fleet size. With plans to add capacity in the next four years, Allegiant could need even more aircraft, unless it decides to increase utilization. For now, only in the busiest periods, like March and summer, does Allegiant take utilization above 7 hr. per day.

Allegiant has essentially ruled out the A321, believing it is too large for its unique model; it serves many thin markets only two times per week. Allegiant is increasingly moving into larger markets such as Pittsburgh, Cincinnati and Indianapolis, but the airline suspects even those cities cannot support larger aircraft on its leisure-focused routes. 

For now, Allegiant estimates it probably has enough A319s, so it will mostly be looking for A320s. “Ideally we would like to have more A320s than A319s,” Doxey said. 

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The ideal aircraft would come to Allegiant just after expensive heavy maintenance, and the engine checks that usually come when the aircraft is 12-14 years old. Generally, though not always, Allegiant buys aircraft from a lessor. Bricker said a typical used Airbus narrowbody costs about $15 million, and reported that plenty are available. “We are finding a sufficient supply to meet our replacement requirements.”  

So far, all of Allegiant’s Airbus fleet has come from six operators: EasyJet, Iberia, Hamburg Airways, Cebu Pacific, Philippine Airlines and Aer Lingus. The largest number of future aircraft is expected to come from EasyJet—15 A320s. That commonality will make easier for Allegiant to introduce them into the fleet, but Bricker said Allegiant will take aircraft from any operator, so long as they are powered by CFM engines. “Anything else we can deal with,” he added. 

 

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