United Airlines Plans Record Expansion of Its Aircraft Fleet

Plane prices vary greatly by transaction, but such large aircraft purchases are typically deeply discounted and Boeing’s outsized share o...

Plane prices vary greatly by transaction, but such large aircraft purchases are typically deeply discounted and Boeing’s outsized share of the order probably reflects an even better deal for United, according to George Dimitroff, head of aircraft valuations for Ascend by Cirium, a consulting firm that specializes in aviation.

For Boeing, the order is one of several it has won in the months since global regulators began lifting their bans on the 737 Max late last year. The manufacturer has struggled to sell a larger 737 Max model, the Max 10, but United’s order includes 150 of those jets and 50 of the smaller and more popular Max 8. That is important because while the two models cost nearly the same to build, a Max 10 sells for more. Cirium values a Max 10 at about $50 million apiece, compared with less than $44 million for a Max 8. (United said the Max 10 would seat 189 passengers compared with 166 for the Max 8. The A321neo will seat about as many as the Max 10.)

“It makes sense for United, it makes sense for Boeing,” Mr. Dimitroff said.

The new planes are best suited for domestic flights, though they could be used on some trans-Atlantic routes. And while the order includes none of the larger, twin-aisle planes typically used for international flights, United has taken delivery of about 30 of those planes — Boeing 787s and 777s — over the past two years.

“There wasn’t a need for us to order wide-body jets right now,” Mr. Nocella said. The airline expects to fly more flights internationally in the summer of 2022 than it did in 2019, he added.

United laid the groundwork for this week’s order last summer during a daylong executive meeting at O’Hare International Airport in Chicago, said Scott Kirby, the airline’s chief executive. The airline decided not to retire any planes during the pandemic, which other airlines were doing, and began to lay the strategy for the current order.

“We sat around and spent the day talking about where we thought the world was going to go, and it’s turned out to be very close to what we thought it would be,” Mr. Kirby said in a call with reporters.

Air travel has slowly recovered throughout the pandemic, a recovery that accelerated in recent weeks as people begin summer vacations. On Sunday, the Transportation Security Administration screened nearly 2.2 million people at airports, the most since the pandemic began 16 months ago. United said this week that it expected to earn a monthly pretax profit in July, its first since January 2020.

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Newsrust - US Top News: United Airlines Plans Record Expansion of Its Aircraft Fleet
United Airlines Plans Record Expansion of Its Aircraft Fleet
Newsrust - US Top News
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