Alaska Air Expanding Fleet With 30 Mainline And Regional Aircraft

Alaska Air Group (ALK) plans to add 30 mainline and regional aircraft to its fleet. The aircraft will strengthen the airline’s fleet in anticipation of a boom in domestic travel post-COVID-19.

The airline is betting on a recovery in domestic travel as early as the summer of next year. In preparation, Alaska Air will add 17 new Embraer 175 jets, nine of which will be operated by Horizon Air and eight by SkyWest (SKYW). The 17 airplanes will grow Air Group’s fleet to 111 planes.

“Regional aircraft play a huge role in Alaska’s growing network,” said Nat Pieper, SVP of fleet, finance, and alliances. “As our network expands, regional aircraft connect smaller communities to our larger hubs providing critical feed to assist in the development of new markets.”

Alaska Air also has a deal in place for 13 Boeing 737-9 Max aircraft, slated for delivery between 2023 and 2024. Last year, it inked an agreement with Boeing (BA) for 68 737-9 MAX aircraft, scheduled for delivery between 2021 and 2024. The deal includes a provision for an additional 52 deliveries between 2023 and 2026.

Additionally, Alaska Air will offer a non-stop airline service to Belize, Central America from the West Coast. This route adds to the 3 countries to which Alaska already flies from the West Coast. As a one-world global alliance member, the airline offers coverage to around 1,000 destinations worldwide. (See Alaska Airlines stock analysis on TipRanks).

Susquehanna analyst Christopher Stathoulopoulos maintains a Buy rating on the stock. However, the analyst has lowered his price target to $85 from $90, implying 31.23% upside potential to current levels.

Consensus among analysts on Wall Street is a Strong Buy based on 10 Buy and 1 Hold ratings. The average analyst price target of $84.45 implies 30.38% upside potential to current levels.

ALK scores a 5 out of 10 on TipRanks’ Smart Score rating system suggesting its performance is likely to align with market expectations.