New airports and new routes are relatively common announcements for Ultra-Low Cost Carrier Allegiant Airlines. New airplanes, on the other hand, not so much. As in never. The company has never taken delivery of a new aircraft directly from a manufacturer before. That will change next year as the company takes delivery of 12 new A320 aircraft from Airbus during the 2017-2018 timeframe.
Allegiant is renown for buying second-hand aircraft on the cheap and pushing them hard, essentially using them until the next major (and expensive) maintenance check comes due. Rather than performing the major check the planes are retired and “new” old planes are brought in to replace them. This approach worked for many years as the company cycled through MD-80 family aircraft that other commercial carriers no longer wanted to use. The low acquisition costs offset the higher operating costs and allowed Allegiant to be flexible in parking aircraft in the face of higher fuel costs or troughs in demand.
The company altered that plan slightly in recent years, moving from the MDs to A320 family aircraft. Still only buying used and cheap, Allegiant essentially followed a path many other airlines have taken over time, just decades later. The acquisition costs remained low and the operation remained profitable. But now it is buying new planes, so what gives?
The purchase was an opportunistic one, according to company CEO Maury Gallagher. It is not a change in company strategy, just an offer Allegiant couldn’t resist. The 12 deliveries are being described as “end-of-line” slots, essentially some of the final unsold A320 classic engine option (ceo) models available before the lines shift fully to the new engine option (neo) production. And almost certainly dirt-cheap. The move also allows Allegiant to accelerate its fleet simplification plan, retiring the MDs and the handful of 757s it acquired for Hawaii service that launched in 2012 but which was never particularly successful.
Allegiant is not United Airlines took similar delivery slots for 737-700 and 777-300ER aircraft recently as Boeing is also shifting its manufacturing lines to the 737 MAX and 777X models.