UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Date of earliest event reported)
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation)
| (Commission File Number) | (IRS Employer Identification No.) | |||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
(206 ) 392-5040
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Ticker Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
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This document is also available on our website at http://investor.alaskaair.com
ITEM 8.01. Other Events
On November 23, 2020, Alaska Air Group, Inc. (the Company) announced a transaction with Air Lease Corporation (ALC) to sell 10 owned Airbus A320 aircraft and replace those aircraft with 13 new leased Boeing 737-9 MAX (MAX) aircraft. The 13 new MAX aircraft will be delivered beginning fourth quarter 2021 through 2022. The Company will lease all 10 Airbus A320 aircraft back from ALC in the interim period between sale of those aircraft and delivery of the first 10 MAX aircraft. As a result of the transaction, certain debt which was previously collateralized by the 10 Airbus A320s was prepaid. Prepayment of the debt and the associated fees totaling approximately $272 million, as well as sales proceeds received, are excluded from our cash burn projections in the fourth quarter.
The Company has issued a press release related to the transaction. The press release is attached as Exhibit 99.1.
ITEM 9.01 Financial Statements and Other Exhibits
| Press Release dated November 23, 2020 | ||||||||
| 104 | Cover Page Interactive Data File - embedded within the Inline XBRL Document | |||||||
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ALASKA AIR GROUP, INC.
Registrant
Date: November 23, 2020
/s/ CHRISTOPHER M. BERRY
Christopher M. Berry
Vice President Finance and Controller
Ex. 99.1
Contact:
Media Relations
(206) 304-0008
newsroom@alaskaair.com
Alaska Airlines further modernizes fleet with 13 new leased 737-9 MAX aircraft
SEATTLE — Alaska Airlines announced a transaction today that continues the optimization of its mainline fleet. As part of the agreement, Alaska will sell 10 Airbus A320s to Air Lease Corporation, and subsequently lease 13 new Boeing 737-9 MAX aircraft from them. The 13 737-9 MAX aircraft will be delivered from fourth quarter 2021 through 2022. Alaska will lease the A320s back from Air Lease for a short period of time after the transaction closes.
“Alaska’s relationship with Steve dates back to the early 1980s and we’re thrilled to work with him and ALC on an agreement that will enhance our fleet and advance our environmental, operational and financial performance,” said Brad Tilden, Alaska Air Group chairman and CEO. “We found an opportunity to sell 10 planes that are not in our long-term plans and replace them with 13 of the most efficient narrow-body aircraft available.”
“We are honored and pleased to renew our long association and partnership with our friends at Alaska Airlines,” said Steven F. Udvar-Házy, executive chairman of Air Lease Corporation. “These leased Boeing 737-9 aircraft from ALC will fill an important role on Alaska’s diverse route network, bringing the most technologically advanced and environmentally attractive aircraft type into Alaska’s fleet, just in time as we expect the airline industry will undergo a sustainable recovery starting in 2021.”
The MAX aircraft are 20 percent more fuel efficient and generate 20 percent less carbon emissions per seat than the A320s they will replace. The aircraft is also able to fly 600 miles farther than Alaska’s current A320, which opens the possibility of additional nonstop routes and new destinations.
The 13 leased aircraft are in addition to the 32 MAX Alaska currently has on order with Boeing – five of which are expected to be flying by summer 2021. Alaska will begin flying the 737-9 MAX in March 2021. Read more about how Alaska will prepare to fly its first MAX at alaskaair.com/737MAX.
After permanently parking all A319s and some A320s earlier this summer, this deal leaves Alaska Airlines with 39 A320s in the operating fleet along with 10 A321neos.
Alaska Airlines and its regional partners serve more than 115 destinations across the United States and North America. The airline provides essential air service for our guests along with moving crucial cargo shipments, while emphasizing Next-Level Care. Alaska is known for low fares, award-winning customer service and sustainability efforts. Guests can earn and redeem miles on flights to more than 800 destinations worldwide with Alaska and its Global Partners. On March 31, 2021, Alaska will officially become a member of the oneworld global alliance. Learn more about Alaska at newsroom.alaskaair.com and blog.alaskaair.com. Alaska Airlines and Horizon Air are subsidiaries of Alaska Air Group (NYSE: ALK).
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