US carrier Allegiant Air to buy 50 Boeing 737 MAX jets: Sources

SEATTLE/PARIS (REUTERS) - Allegiant Air is poised to order 50 Boeing 737 MAX jets worth US$5 billion (S$6.8 billion) at list prices, people familiar with the matter said, rejecting offers by traditional supplier Airbus as the no-frills carrier seeks to capture a boom in post-pandemic US tourism.

The surprise deal stems a series of setbacks for Boeing and overturns the airline's previous strategy of picking up second-hand jets at bargain prices, which had helped it accumulate more than 100 jets built by Boeing's European rival.

The switch of suppliers is the third such airline defection in as many weeks, this time working in Boeing's favour after the US planemaker lost hard-fought medium-haul contests to Airbus at Dutch KLM and Australia's Qantas.

Such "flips" are rare because of the cost of retraining pilots, but reflect fierce competition for new business as the aerospace industry seeks to recover from its worst recession.

The deal is the latest sign of accelerated growth among "ultra-low-cost" carriers that combine rock-bottom fares with optional charges. Carriers like these are expected to emerge in a position of relative strength from the Covid-19 pandemic.

"The leisure market is coming back in droves relative to the business market," said one of the people familiar with Allegiant's plans.

The new Boeing planes would replace retired jets and feed Allegiant's growth plans over the coming years.

Mexico's Viva Aerobus in December announced a commercial alliance with Allegiant to offer flights between the United States and Mexico.

The deal, which is likely to be counted in December's orders for Boeing, caps a tight annual order race with Airbus.

Boeing bounced back from a safety crisis to sell some 700 MAX planes till end-November, only to lose two of the industry's most widely watched contests to rival Airbus at Qantas and various subsidiaries of Franco-Dutch group Air France-KLM.

Both planemakers are due to publish 2021 data next week.