Alaska retires it's 732's

By: steve rowell - 29th July 2004 at 01:32

A decade ago, Alaska Airlines knew it should soon retire its fleet of unique Boeing 737-200s that could carry both passengers and pallets of cargo to remote towns in the state of Alaska's bush.
There were ample reasons to put the planes out to pasture - but even more persuasive reasons to keep them in the fleet of the SeaTac-based airline.
That's why it took 10 years and escalating competitive pressure for Alaska to announce it will retire its oldest but most versatile and flexible airliners. The airline finally said this month it is taking a $37.2 million charge to retire the planes.
At the heart of the decision, said Alaska spokesman Sam Sperry, were costs. "The -200s were just getting too costly to fly and maintain," he said.
But the decision wasn't easy, airline officials said.
Consider the 737-200's strengths and weaknesses:
•The 737-200s were among the first generation of the world's most popular airliner, the 737. While they are still safe and reliable, they lack the sophisticated electronic landing and instrumentation systems of the second- and third-generation 737s.
•Their 1960s-era engines consume more fuel than their newer counterparts.
•Their maintenance costs are growing as their aging airframes require more inspection and repair. The nine aircraft average 23 years old.
The airline was faced with doing major overhaul work on some of the planes, and the economics didn't work, said Irving Bertram, Alaska's associate general counsel. Bertram was deeply involved in acquisition of most of the airline's 108-plane fleet.
"We found that we needed to do an overhaul that would cost $3 million to $5 million on some planes," he said. "When we were done with that overhaul, the planes were worth about $3 million on the used market."
But there was no ready replacement aircraft that offered the versatility and utility of the 737-200s, Bertram said.
The nine 737-200s Alaska flies are among a highly specialized breed of planes that Boeing built in limited numbers for remote markets such as the state of Alaska. The planes were built for quick conversion between cargo and passenger-carrying roles.
Alaska's workers became so adept at changing the aircraft's configuration that they could change a 737-200's interior from a 111-passenger plane to a freighter in about an hour. The -200s also could be configured to carry a mix of passengers and cargo for markets where there was demand for both.
"For many of the communities we serve, air transportation is the only quick and reliable way to get there," Bertram said.
The ability to convert the planes between passengers and cargo also meant the airline could squeeze more use from the planes. They could carry passengers in the daytime and cargo at night.
The cargo-carrying capacity also meant the aircraft could handle the surges in cargo traffic when the Alaska fishing seasons were at their peaks
The aircraft achieved the flexibility by mounting groups of seats on rollers that would allow their easy movement off and on the planes and the fitting of the aircraft with a large cargo door that allowed large containers or pallets of freight to be put aboard.
A movable airtight partition separated the cargo area from the passenger area.
A replacement plane?

That partition is one reason that there is no later generation version of the 737 that matches the -200's convertibility, Bertram said.
"The FAA (Federal Aviation Administration) said they wouldn't be approving a movable partition in newer airliners," he said.
Boeing offered to build Alaska a new, third-generation 737 in a combination configuration that included both passenger and cargo spaces, but the configuration wasn't easily changeable. Besides, said Bertram, the new planes were too expensive at a time when the airline is trying to keep costs low.
An outside vendor, knowing Alaska's problem, proposed leasing the airline second-generation 737-300s in a fixed passenger-cargo configuration, Bertram said. The airline demurred.
The aircraft would be coming off lease from another airline, and Alaska didn't want to lease aircraft that were likely differently configured than its own.
They might have different instruments and radar, slightly different engines and different interiors. All of those differences could add expense to Alaska's bill for bringing them up to its standards.
And used planes can bring maintenance surprises.

"You can do everything you can to inspect a plane before you buy it," Bertram said, "but you never really know what shape it's in until you start taking it apart."
Converting its own fleet

Alaska's executives took the idea of converting newer passenger planes to combination models and applied the idea to its own fleet. Thus emerged a plan to retire the -200s and replace them with 737-400s from Alaska's own fleet - converted to combination cargo and passenger liners.
The airline will convert four of its passenger 737-400s to what it calls "combis" and a fifth -400 to an all cargo aircraft.
The -200s will be retired gradually beginning next year, with the last one leaving service with the airline in 2007.