Boeing Frontiers
June 2003
Volume 02, Issue 02
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Industry Wrap

Alaska Air seeks deals

Seattle-based Alaska Air Group Inc. said it would take its time evaluating various options for buying or leasing new jetliners, noting the current air travel slump had opened up a wide range of positive options, according to Reuters English News Service.

The parent company of No. 9 U.S. carrier Alaska Airlines, which has an all-Boeing fleet, has asked rival jet maker Airbus for a price on replacing some older jets and could also get cheap rates from lessors, the news service said.

"Alaska has never had more flexibility than they have today and that means you parlay that into the best deal we can get," Jack Kelly, who just retired as the company's chairman, told Reuters before the company's annual meeting.

While noting the carrier is quite happy with Boeing and its Boeing 737 narrowbody jets, Alaska executives said they might save money by tapping the large fleet of jets stored at desert airstrips or extending current leases at low rates, Reuters said.

With several U.S. airlines in bankruptcy and more teetering on the edge, Boeing, Airbus and lessors have all faced pressure to cut jet prices.

With an order book of 14 new jets slated for delivery through 2004, Alaska can afford to wait for the market bottom before buying more, Reuters said.

"Those [bankrupt] carriers are negotiating with leverage that no one else has, so we have to see how that shakes out in order to make the best final deal for us. You wouldn't want to be too early on that," Kelly told Reuters.

Airlines have also negotiated billions of dollars in concessions from their unions during the current industry slump, which many consider the worst ever.


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