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United Airlines orders 270 aircraft, largest aircraft purchase ever

The list price for the 270 jets totals about $35 billion. in general Airlines will pay only a fraction of the list price. And because now isn’t a good time to sell the plane, United is willing to pay much less than half the list price.
United are likely to receive significant discounts, especially in the 200. Boeing (B.A.) 737 Max aircraft assembled in bulk orders The remainder of the order is 70. airbus (EADSF) A321neo aircraft
on monday, United (UAL) It told investors it expected to post adjusted pre-tax profit in July, the first sign of profitability by United or any major airline since the start of the Covid-19 pandemic. The demand for leisure travel is nearing its return to normal. help increase the fare Even more lucrative business travel and international flights are still a fraction of what. They were before the pandemic.

“It’s a sign that United is a smart aircraft buyer,” said Ron Epstein, aerospace analyst at Bank of America. with the return of the aviation market They wouldn’t do that.”

change to smaller planes

United will use most of the jets it ordered Tuesday to replace more than 200 smaller regional jets, each capable of carrying around 50 passengers, allowing capacity to be increased without increasing flights. At airports such as Newark and San Francisco which limits the boarding and landing of each airline It will also replace 100 older full-sized aircraft.

It should be welcome news for passengers prone to smaller planes, CEO Scott Kirby said in an investor presentation Tuesday.

“We are trying to fly a 50-seat regional jet between Chicago and Dallas or between Newark and Atlanta. And we are trying to compete with people who have a much better product,” CEO Scott Kirby said in an investor presentation Tuesday. “We didn’t have the opportunity to compete effectively. This statement is about resolving and building a domestic network with products that our customers love.”

United currently says its regional planes are being used for a third of its domestic flights. Tuesday’s purchases will bring that figure down to 10%.

Expectations for the recovery of business and international travel

Combining Tuesday’s orders and previous orders in the books, United now has orders for 500 new jets coming in the next few years. It has 40 aircraft, most of which are wide-body jets used on long-haul routes. Due next year and 138 in 2023 alone.

It’s a remarkable change from last year. When demand is insufficient, it forces United and other airlines around the world to park planes and stop buying and delivering planes. New jet deliveries this year will still be a fraction of pre-epidemic levels. But like United Southwest and delta (from) It has also announced aircraft purchases in the past few months.

“Something that makes a difference each year,” Kirby said. But he said United had been planning for a recovery and discussed a purchase since last summer, adding: “This is what we expected it to be” at this point.

Kirby told investors that business travel was accelerating. and while still down 60% from pre-plague levels That’s an improvement from a 90% drop earlier this year. International travel remains limited. Many countries still limit cross-border travel. But Kirby and other United executives expect international travel to be a record next year.

However, aircraft deliveries will remain slow this year and next. United said in a Tuesday filing that it expects the first planes on Tuesday’s order to arrive in 2023. Orders include the 737 Max. The newest 150 model, the Max 10, had its first test flight earlier this month, and it wasn’t. Not yet certified as a passenger

Plans to add 25,000 jobs

United plans to add about 25,000 jobs over the next five years to 68,000 on the current front line. by hiring a pilot flight attendants, mechanics, door agents and other staff needed to manage the expected increase in passenger traffic.

The airline laid off about 22,000 workers last year during the economic downturn. Although the airline is recalling some of its staff in response to the rising leisure travel efforts.

It was the largest order for the 737 Max since it was suspended for 20 months starting in March 2019 after two fatal accidents that left 346 people dead.
Why are airfares always getting more and more expensive?
southwest (LUV)which owns more Max aircraft than any other airline. It has ordered 134 additional 737 Max jets since the US Federal Aviation Administration. approved for the aircraft to fly again But despite United’s orders on Tuesday, Boeing has not received more than 1,000 canceled best-selling plane orders since the March 2019 halt.
As far as this is a key confidence vote for Boeing and the 737 Max, demand for the aircraft remains relatively low. This brings down prices that aircraft manufacturers can charge. Boeing has slowed production of its aircraft. Close a factory in Washington state. which built the Boeing 787 Dreamliner wide-body aircraft. and reduce staff
United has ordered 50 additional 737 Max aircraft since an overhaul in November last year, 25 of which were built during landing but failed to deliver because the original order was cancelled.

United also said It will improve the interior of all existing regular sized jets. Add a backrest entertainment system bigger trash and seat Additional “Economy Plus” with additional legroom and higher fares

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