US airline fleet strategy and finance Part 2: Alaska and Southwest differ in leveraging their fleets

The two US investment grade airlines - Alaska and Southwest - have steady delivery streams planned from Boeing during the next couple of years as they work to ensure that the average age of their respective fleets remain optimal.

But Alaska and Southwest are taking different approaches to their fleet fortification. Alaska is choosing to stick with new-build aircraft to replace 737 Classics exiting its fleet while Southwest is opting to add a mix of new and pre-owned aircraft to sustain its fleet at around 700 aircraft in 2015.

Both airlines own a solid portion of their respective fleets, allowing for a certain level of flexibility if market conditions change. Although each airline's investment grade status allows for favourable market rates, Alaska for the moment has no plans to finance aircraft through debt, but is not ruling out the possibility in the future.