Exclusive: Boeing in talks with Alaska Airlines for potential 737 MAX order - sources
By Eric M. Johnson and Tracy Rucinski
SEATTLE / CHICAGO (Reuters) - Boeing Co <BA.N> is currently discussing the sale of 737 MAX jets to Alaska Airlines once the plane is back into service after an extended landing, said three people familiar with the matter.
The talks are part of a series of negotiations between Boeing and multiple airlines over jet orders or compensation after the 737 MAX was banned worldwide after two fatal crashes.
Boeing and Alaska Airlines, part of Alaska Air Group Inc. <ALK.N>, declined to comment.
Each deal is subject to approval by the US Federal Aviation Administration for the proposed 737 MAX security upgrades.
Boeing stock was up 1.6% on Thursday afternoon to $ 167.22 while Alaska Air stock was up 4.1% to $ 38.54.
Alaska Airlines had already ordered 37 of the jets before landing. If confirmed, a new order from such a large airline would give Boeing's 737 MAX a much-needed commercial boost as the U.S. aircraft maker tries to move beyond a crisis that has weighed on its finances.
It would also be a test after the crisis of the balance of power between Boeing and Airbus <AIR.PA>. The European aircraft manufacturer is fighting to gain a foothold with Alaska Airlines, which operated a pure Boeing fleet until the takeover of Virgin America in 2016.
However, any new deal between Alaska Airlines and Boeing is expected to include significant discounts in light of the issues facing MAX and falling demand for aircraft during the coronavirus crisis.
It wasn't immediately clear how many jets it could buy.
The talks are part of several discussions Boeing is having with airlines in hopes of stimulating demand for the jet when it gets back in the air. Analysts warning not to cut prices too far could shake some existing customers.
After months of delays and pending approval of design and operational changes, Boeing expects to resume shipments of the 737 MAX to airlines in the United States before the end of the year.
Alaska Airlines, based in Seattle, flies 166 older Boeing 737s and 71 Airbus A320 family aircraft.
It has one of the strongest balance sheets among U.S. airlines and analysts believe it could emerge from the pandemic crisis in a competitive position relative to its peers.
Boeing is also negotiating with Irish budget carrier Ryanair <RYA.I>, one of its largest customers, to compensate for delays in MAX deliveries and a possible new order.
(Reporting by Eric M. Johnson in Seattle and Tracy Rucinski in Chicago; Editing by David Gregorio and Matthew Lewis)
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