lightsaber wrote:

This gives Allegiant high flexibility in buying used too. A win-win if true. The MAX-200 would be perfect for G4. Their ancillary revenue needs more butts in seats. A few more seats will pay the cost difference.

jbs2886 wrote:

Did Allegiant get a good deal? Very likely. But giving them away? That has no basis in reality.

zkojq wrote:

jbs2886 wrote:

Did Allegiant get a good deal? Very likely. But giving them away? That has no basis in reality.

So which MAX deals do you speculate that Boeing got good margins on then?

Polot wrote:

1) A big factor on the better reliability with the A320s is as a whole they are much newer than the MD-80s we’re with better support.
2) The public has long moved past questioning Allegiant safety. That was in the news cycle in what, 2018? They never had a crash to cement it in people’s memory.

Dutchy wrote:

these would have probably been produced in Mobile, US. Don't know if it is that much cheaper to have the production there then in Quebec, at least no additional charges to bring it into the country.

tphuang wrote:

Opus99 wrote:

https://www.reuters.com/business/aerospace-defense/exclusive-us-carrier-allegiant-air-buy-50-boeing-737-max-jets-sources-2022-01-04/

Article here.

737 max 7 seemed to have been pitted against the A220.

Max 7 was the choice.

Maybe Airbus could have won this one if their offering was a mixture of A220-300 and 500. They should think about it.

Polot wrote:

lightsaber wrote:

This gives Allegiant high flexibility in buying used too. A win-win if true. The MAX-200 would be perfect for G4. Their ancillary revenue needs more butts in seats. A few more seats will pay the cost difference.

People are so focused on 7M7 vs A220 that they are completely missing that the news report said that that was only part of the order. I thinks it’s the larger Max family members that are giving the Max 7 an apparent edge. The A220 means maxing out at ~150-160 seats with that pilot group at the moment.

It’s a similar reason as to why Spirit opted for the A319neo over the A220.

wjcandee wrote:

Polot wrote:

1) A big factor on the better reliability with the A320s is as a whole they are much newer than the MD-80s we’re with better support.
2) The public has long moved past questioning Allegiant safety. That was in the news cycle in what, 2018? They never had a crash to cement it in people’s memory.

Well...Allegiant itself (and its pilots) repeatedly have said it had to do with the diagnostics, etc. But support is of course key.

As to (2), wait until the pilot contract becomes amendable. The whole "safety" sledgehammer worked last time, so why not dust off that playbook again?

SEU wrote:

Polot wrote:

lightsaber wrote:

This gives Allegiant high flexibility in buying used too. A win-win if true. The MAX-200 would be perfect for G4. Their ancillary revenue needs more butts in seats. A few more seats will pay the cost difference.

People are so focused on 7M7 vs A220 that they are completely missing that the news report said that that was only part of the order. I thinks it’s the larger Max family members that are giving the Max 7 an apparent edge. The A220 means maxing out at ~150-160 seats with that pilot group at the moment.

It’s a similar reason as to why Spirit opted for the A319neo over the A220.

Yes, this is being overlooked

I am guessing A321neo is out of their price range so have had to look at alternatives. I can see a mix of -7, -8 and -10 for G4 if they eventually order the Max

Newark727 wrote:

Allegiant buying new planes? Next we'll have dogs and cats living together! Mass hysteria!

WaywardMemphian wrote:

So much for that A-Net trope about the added cost of a mixed fleet.

Polot wrote:

wjcandee wrote:

This seems completely-nuts. Has Allegiant had a change of leadership recently? Does Maurice Gallagher have Alzheimer's or some other personality-altering disease? This is a complete-reversal of everything every airline he has been involved with has done. Moving to the A320 raised their reliability enormously, because of the predictive-maintenance/onboard-diagnostics stuff. Presumably, the MAX has something similar, but...seriously??? As if people weren't already worried (perhaps irrationally) about safety with Allegiant -- and they're getting the MAX?

"We digested and are running smoothly with the A320-series. So now we're going to take on a huge project to bring aboard another fleet, with all the training of the entire operation, from agents to maintenance to compliance, to FAs, to pilots." Why? That was so much fun we want to do it again? It's not like the market for used A320CEOs has dried up. Just weird.

But whatever. It's their company, and their fate.

1) A big factor on the better reliability with the A320s is as a whole they are much newer than the MD-80s we’re with better support.
.

majano wrote:

Polot wrote:

wjcandee wrote:

This seems completely-nuts. Has Allegiant had a change of leadership recently? Does Maurice Gallagher have Alzheimer's or some other personality-altering disease? This is a complete-reversal of everything every airline he has been involved with has done. Moving to the A320 raised their reliability enormously, because of the predictive-maintenance/onboard-diagnostics stuff. Presumably, the MAX has something similar, but...seriously??? As if people weren't already worried (perhaps irrationally) about safety with Allegiant -- and they're getting the MAX?

"We digested and are running smoothly with the A320-series. So now we're going to take on a huge project to bring aboard another fleet, with all the training of the entire operation, from agents to maintenance to compliance, to FAs, to pilots." Why? That was so much fun we want to do it again? It's not like the market for used A320CEOs has dried up. Just weird.

But whatever. It's their company, and their fate.

1) A big factor on the better reliability with the A320s is as a whole they are much newer than the MD-80s we’re with better support.
.

You state this as fact without any support. Is this your opinion or are you able to back it up?

DarkSnowyNight wrote:

No. 220s are manufactured in Quebec and Mobile.

BBD had more problems than a jailhouse sex life, of which the 220 was hardly one of.

A220 production costs grow largely from vendor issues, which are being sorted. As well, production costs are also a function of volume delivered. You need to be reminded that when the 787 had only 186 units delivered, their margins v production were worse. Much.

With no major hold ups, and better than planned operational metrics, the cost issues with the 220 really are down to units delivered an variants available. Both of which are being addressed faster than BCA should ever be comfortable with.

majano wrote:

Polot wrote:

wjcandee wrote:

This seems completely-nuts. Has Allegiant had a change of leadership recently? Does Maurice Gallagher have Alzheimer's or some other personality-altering disease? This is a complete-reversal of everything every airline he has been involved with has done. Moving to the A320 raised their reliability enormously, because of the predictive-maintenance/onboard-diagnostics stuff. Presumably, the MAX has something similar, but...seriously??? As if people weren't already worried (perhaps irrationally) about safety with Allegiant -- and they're getting the MAX?

"We digested and are running smoothly with the A320-series. So now we're going to take on a huge project to bring aboard another fleet, with all the training of the entire operation, from agents to maintenance to compliance, to FAs, to pilots." Why? That was so much fun we want to do it again? It's not like the market for used A320CEOs has dried up. Just weird.

But whatever. It's their company, and their fate.

1) A big factor on the better reliability with the A320s is as a whole they are much newer than the MD-80s we’re with better support.
.

You state this as fact without any support. Is this your opinion or are you able to back it up?

sxf24 wrote:

majano wrote:

Polot wrote:

1) A big factor on the better reliability with the A320s is as a whole they are much newer than the MD-80s we’re with better support.
.

You state this as fact without any support. Is this your opinion or are you able to back it up?

Are you asking for facts that newer, in-production airplanes are more reliable than older, out-of-production airplanes with a limited operator base?

Opus99 wrote:

Every ne onTwitter is saying this is a huge win for Boeing

According to Jon Ostrower- at the Dubai airshow allegiant was seriously considering the a220-300

Jetport wrote:

DarkSnowyNight wrote:

Dutchy wrote:

No way of knowing, but it is likely the M7. Contrary to a.net meme, A220 production costs are not that atrocious, and they are being brought into line and will eventually drop further still. The M7 OTOH, will never see profitability.

+

The A220 production costs really are that atrocious. Considering the economies of scale and the fact that the MAX 7 is a simple shrink would indicate it should be significantly cheaper to make than the lower production, high cost A220. Have you forgotten the A220 drove the 3rd largest commercial aircraft maker out of the business? Have you forgotten the A220 is made in Quebec, with high labor costs, lots of regulations and ridiculous and costly language laws?

DenverTed wrote:

How will they configure a potential MAX 7? 174 seats at 28" pitch? Maybe 150 seats with an extra wide seat and extra pitch section for a small premium.

MIflyer12 wrote:

I hope everyone realizes that Allegiant operates more narrowbodies than KLM + Transavia. All that crowing about KLM ordering Airbus... crow shall now be eaten.

cbphoto wrote:

There is more to this order then just price as well. No doubt G4 got a great deal from Boeing, but time line is key to this order. The earliest G4 could get a NEO was the 2025/6 time frame and G4 needed something much sooner for their planned growth. With the current used CEO options, they would fall short on their growth plans.

I’m not sure why people are so shocked at the Max 7. It would likely be the 319 replacement and the 8200 would be the 186 seat 320 replacement. Again, it’s all speculation until the order is confirmed, but I’d bet the Max 7 is a small part of the over all order. And if it turns out to be true, I’d say the Airbus days at Allegiant are suddenly numbered.

MIflyer12 wrote:

Jetport wrote:

DarkSnowyNight wrote:

+

The A220 production costs really are that atrocious. Considering the economies of scale and the fact that the MAX 7 is a simple shrink would indicate it should be significantly cheaper to make than the lower production, high cost A220. Have you forgotten the A220 drove the 3rd largest commercial aircraft maker out of the business? Have you forgotten the A220 is made in Quebec, with high labor costs, lots of regulations and ridiculous and costly language laws?

Airbus said last year that A220 deliveries didn't even cover variable cost, let alone mfg overhead, engineering overhead, SG&A, and profit. Zero contribution margin was the reference in Feb. 2021.

tphuang wrote:

Revelation wrote:

Dutchy wrote:

that would be quite surprising to me, both would represent a new fleet for them, but the A220 seems to be better suited than the 737M7, too heavy for what it is. To offset that difference in operating cost, the price must be quite low.

IMO all that was needed was to offer similar pricing and better availability than Airbus Canada can. Given the recent QF and KL deals and the low production rate, chances are that the queue for A220s is quite long these days. A nice kind of problem to have, but still, not ideal. The Bloomberg article talks a lot about Allegiant wanting to cash in on recent strong demand for non-business flights. Hard to do that if you can't get airplanes.

Right, even if we accept the notion that A220 is more efficient (which I think is the case), pricing and availability does matter. Have multiplier suppliers also helps with negotiation power. It doesn't seem like G4 mind having multiple fleet types.

orlandocfi wrote:

DenverTed wrote:

How will they configure a potential MAX 7? 174 seats at 28" pitch? Maybe 150 seats with an extra wide seat and extra pitch section for a small premium.

The -7 is exit limited to 172. And I’m sure G4 will pack that many on!

2eng2efficient wrote:

A core part of G4’s competitive strategy is to source aircraft at the lowest practical cost today. They must heavily discount future benefits/synergies and intangibles in the decision model - it’s all about net cash flows in the first few years. Maury’s shareholder letters frequently riff on this point.

This is G4’s first purchase of an aircraft in this generation, however, I expect G4 to continue to position this as “We got these planes at an exceptionally good deal” - Read: Even after fleet conversion costs, we paid less than a new fleet of A220s, yielding better cash flow in the near term.

Jon Ostrower calling G4 a “bottom feeder” (tongue-in-cheek) in his most recent tweet illustrates this.

MIflyer12 wrote:

orlandocfi wrote:

DenverTed wrote:

How will they configure a potential MAX 7? 174 seats at 28" pitch? Maybe 150 seats with an extra wide seat and extra pitch section for a small premium.

The -7 is exit limited to 172. And I’m sure G4 will pack that many on!

The A319s and A320s have 30 inch pitch - no worse than many U.S. legacy narrowbodies. I wouldn't bet Allegiant will keep seat count to 150 or fewer but it's not inconceivable.

DenverTed wrote:

MIflyer12 wrote:

orlandocfi wrote:

The -7 is exit limited to 172. And I’m sure G4 will pack that many on!

The A319s and A320s have 30 inch pitch - no worse than many U.S. legacy narrowbodies. I wouldn't bet Allegiant will keep seat count to 150 or fewer but it's not inconceivable.

At 30" pitch I would estimate 32 rows x 6 at 162. I suppose it will depend on the exit row configuration if it is a multiple of 6, same with WN. Being 6'-5", 30" doesn't work for me. I'm happy to see the MAX 7 get some sales. I think it has a lot of potential for a mixed pitch cabin with 150 seats.

jbs2886 wrote:

cbphoto wrote:

There is more to this order then just price as well. No doubt G4 got a great deal from Boeing, but time line is key to this order. The earliest G4 could get a NEO was the 2025/6 time frame and G4 needed something much sooner for their planned growth. With the current used CEO options, they would fall short on their growth plans.

I’m not sure why people are so shocked at the Max 7. It would likely be the 319 replacement and the 8200 would be the 186 seat 320 replacement. Again, it’s all speculation until the order is confirmed, but I’d bet the Max 7 is a small part of the over all order. And if it turns out to be true, I’d say the Airbus days at Allegiant are suddenly numbered.

Except it’s very clear the competition wasn’t the NEO, it was the A220. That being said, I do think the timeline favored the MAX.

MIflyer12 wrote:

Airbus said last year that A220 deliveries didn't even cover variable cost, let alone mfg overhead, engineering overhead, SG&A, and profit. Zero contribution margin was the reference in Feb. 2021.

MIflyer12 wrote:

orlandocfi wrote:

DenverTed wrote:

How will they configure a potential MAX 7? 174 seats at 28" pitch? Maybe 150 seats with an extra wide seat and extra pitch section for a small premium.

The -7 is exit limited to 172. And I’m sure G4 will pack that many on!

The A319s and A320s have 30 inch pitch - no worse than many U.S. legacy narrowbodies. I wouldn't bet Allegiant will keep seat count to 150 or fewer but it's not inconceivable.

MIflyer12 wrote:

I hope everyone realizes that Allegiant operates more narrowbodies than KLM + Transavia. All that crowing about KLM ordering Airbus... crow shall now be eaten.

Polot wrote:

DenverTed wrote:

MIflyer12 wrote:

The A319s and A320s have 30 inch pitch - no worse than many U.S. legacy narrowbodies. I wouldn't bet Allegiant will keep seat count to 150 or fewer but it's not inconceivable.

At 30" pitch I would estimate 32 rows x 6 at 162. I suppose it will depend on the exit row configuration if it is a multiple of 6, same with WN. Being 6'-5", 30" doesn't work for me. I'm happy to see the MAX 7 get some sales. I think it has a lot of potential for a mixed pitch cabin with 150 seats.

G4 has been experimenting with a Y+ class with extra legroom. I would expect that for additional ancillary revenue potential with the Y cabin squeezed to still maximize number of pax on plane.

DarkSnowyNight wrote:

Again, the 220 is in a better position for this now than the 787 was at this point in its history. There were no concerns here about that then, nor did it have a meaningful impact on sales. AB will not be marketing the 220 as they are if the situation was anything like that now.

Gulfstream500 wrote:

If I recall correctly, this would be the third operator of the -7, with the others being WN and WS. I wonder if they are planning on going "all-in" on the 737s (and eventually ditching the A320 series) or if they are just ordering the -7 for the cheap price? By the number of seats, the -7 would lie somewhere between the A319 and A320...

FLALEFTY wrote:

Polot wrote:

DenverTed wrote:

At 30" pitch I would estimate 32 rows x 6 at 162. I suppose it will depend on the exit row configuration if it is a multiple of 6, same with WN. Being 6'-5", 30" doesn't work for me. I'm happy to see the MAX 7 get some sales. I think it has a lot of potential for a mixed pitch cabin with 150 seats.

G4 has been experimenting with a Y+ class with extra legroom. I would expect that for additional ancillary revenue potential with the Y cabin squeezed to still maximize number of pax on plane.

For comparison, Allegiant currently runs their A319s with 18 "Legroom +" seats (34" pitch) and 138 standard seats (30" pitch). The certified exit limit for the A319 is 156 seats, which matches G4's current layout. The "Legroom +" seats are the 6 facing the front bulkhead and 12 in the 2 over-wing exit rows. Their A319s are the 156-seat high-density variants that have 2 over-wing exit rows instead of the usual 1 exit row. They obtained these A319's from EasyJet and Cebu Pacific.

https://www.seatguru.com/airlines/Alleg ... s_A319.php

Based on this, I imagine Allegiant will outfit their new B737-7's at the exit limit of 172.

Polot wrote:

DarkSnowyNight wrote:

Again, the 220 is in a better position for this now than the 787 was at this point in its history. There were no concerns here about that then, nor did it have a meaningful impact on sales. AB will not be marketing the 220 as they are if the situation was anything like that now.

At this point (~5.5 years after EIS) the 787 was cash positive or close to it.