Allegiant already operates 11 MD-80 aircraft that formerly operated for Scandinavian Airlines System (SAS), with two more on the way this quarter. Today, the airline announced that it has ordered 18 additional aircraft to be delivered this year. Allegiant President and CFO said that “once this transaction is complete, we do not expect to need further aircraft purchases to fund growth currently planned through the end of 2011.” The aircraft are between 19 and 25 years old.
Photo credit: Adrian Pingstone.
Allegiant’s news release says that all aircraft will be delivered by the end of the third quarter, while SAS reports that that all will be transfered to Allegiant by the end of the second quarter, for what it’s worth.
The biggest part of the purchase is 13 MD-82/83 aircraft that will all be placed into passenger service by the end of 2011. Five MD-87 aircraft have also been purchased, but will only be used for spare parts to support the existing fleet. Allegiant’s MD-87s are the smallest in its fleet with seating for 130 passengers – the MD-82/83/87s seat 150.
Because of the deal, Allegiant now plans to be operating “at least 52 aircraft by the end of 2010 and as many as 60 aircraft by the end of 2011.”
Where are these aircraft coming from? Well, SAS has been working to reduce its capacity, and as part of that plan 21 aircraft were being removed from service. So, instead of having those aircraft sit and do nothing, SAS found a new home for them quickly, and gets to clean up its balance sheet as the deal reduces net debt by about $28.4 million.
After the aircraft move to Allegiant, SAS will have 24 MD-80s remaining in service “as inexpensive reliable aircraft, as well as aircraft to manage the seasonality effect in the Nordic region,” according to a SAS news release.
A good move for Allegiant – as usual, they get the aircraft for dirt cheap and get to boost their network further. The airline has hinted at adding an additional fleet type in the past, so we’ll have to see what happens there.
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