LDN - Business

United Airlines confirms 270 Boeing and Airbus jet order

[June 29, 2021] By Tracy Rucinski and Eric M. Johnson

(Reuters) -United Airlines confirmed its largest ever order for Boeing and Airbus jets on Tuesday, lining up 270 planes worth more than $30 billion at list prices as the U.S. giant pursues post-pandemic domestic growth.

The 200 Boeing 737 MAX and 70 Airbus A321neo jets will replace smaller mainline planes and at least 200 regional jets between 2022 and 2026, the Chicago-based airline said.

United is the most exposed U.S. airline to international travel, which suffered heavily during the coronavirus pandemic and is rebounding more slowly than domestic travel.

America's third largest airline by revenue will be able to boost the number of seats across its domestic network, which lags major rivals, by almost 30% and get better use out of hubs with the fleet shake-up.

United Chief Executive Scott Kirby said it would "accelerate our business to meet a resurgence in air travel".

The order, confirming a detailed breakdown reported by Reuters on Monday, includes 50 Boeing 737 MAX 8 and 150 MAX 10, accelerating a recovery for the MAX in the wake of a two-year safety crisis overlapping with a COVID-19 travel slump and marking what industry sources called a partial coup for Boeing.

However, its victory over Airbus in the number of units sold was tempered by Europe's continued grip on a lucrative segment for the largest, long-range single-aisles like the A321neo.

The MAX 10, which made its first flight this month, is the largest member of the MAX family and holds up to 230 seats.

The Airbus A321neo is slightly larger and has more range, giving United extra capacity at constrained airports like Newark and San Francisco that play a key role in its growth plans.

"That's one of the primary reasons that the order includes both jet types," Chief Commercial Officer Andrew Nocella said.

Boeing shares were up 0.9% in pre-market trading. In Europe, Airbus shares ticked 0.2% higher at mid-session.

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A United Airlines passenger jet takes off with New York City as a backdrop, at Newark Liberty International Airport, New Jersey, U.S. December 6, 2019. REUTERS/Chris Helgren

CONVERSION RIGHTS

Combined with its current order book, United will receive 500 new, narrowbody aircraft including 40 in 2022 and 138 in 2023. It has flexibility on the remaining deliveries between 2024 and 2026 and the option to convert some of the MAX 10 orders to other variants, a spokesperson said.

The new Boeing and Airbus jets will include new interiors as part of a sweeping cabin overhaul.

United, which unlike major rivals did not retire aircraft during the pandemic despite having one of the oldest U.S. fleets, said it plans to fly the first MAX 8 with the new interior this summer and the MAX 10 and A321neo in early 2023.

The order includes 25 737 MAX "white tails", or orders canceled by other buyers during a lengthy safety grounding.

The airline, which received $10.5 billion in government aid during the pandemic, devoted a large part of its release to a pledge to create 25,000 unionized jobs as part of the purchase.

With the transaction, United's use of 50-seat jets will fall to less than 10% of its domestic departures versus about one third currently, Nocella said.

The order also serves to replace United's aging Boeing 757-200 fleet, though the airline has not yet decided on a replacement for its 757-300s, he told reporters.

Boeing, which was required by regulators to add MAX simulator training for pilots of earlier 737 models after software problems contributed to fatal MAX crashes, said the United deal includes training simulator data packages.

Airbus said a significant number of the newly-ordered A321neo jets would be assembled at its plant in Mobile, Alabama.

(Reporting by Tracy Rucinski and Eric M. Johnson; Additional reporting by Tim Hepher, Ankit Ajmera; Editing by Jason Neely and Alexander Smith)

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