Seattle-based Alaska Airlines is going to get rid of its MD-80 aircraft (pictured) to make way for Boeing 737s, a type of aircraft that the airline already has in service. 26 MD-80s are leaving, and 39 Boeing 737-800s are joining the fleet. Delivery is between now and 2008.
Savings will apparently be about $115 million per year as fuel, operating, and maintenance costs plummet. Although the number of aircraft operated by Alaska will only increase by 4, compared to the beginning of the year, its capacity will increase by 18%.
This is a smart move for Alaska. Sure, the company is going to have to go through two pre-tax charges of $130 million to $150 million, but the savings clearly win in the long run. Interesting to note that Alaska, which is a seudo-low cost carrier, is going to simply its fleet to just Boeing 737s - something that competitor Southwest Airlines has always done.