United orders 270 jets in anticipation of growth

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The Independent

One-liner: United Airlines stated it is ordering 200 Boeing Max jets and 70 Airbus planes so it can replace some of its aging planes and grow after the pandemic eases.

Speculated prices: At list prices, the deal would be worth more than $30bn, although airlines routinely get deep discounts, sometimes more than half, according to analysts. United declined to disclose terms.

Promising future: It is one of the largest orders ever for commercial planes and highlights that airlines are optimistic that demand will return to pre-pandemic levels.

Boost for manufacturers: It is also, of course, a major boost for the world’s two main aircraft makers, especially Boeing. The Chicago-based company saw orders plummet after Max jets were grounded due to two deadly crashes. The pandemic also has hurt sales.

Speculation: “Boeing needs to play a bit of catch-up, and so it likely gave United a steep discount,” George Dimitroff, an analyst with Ascend said. He further said pricing is likely to get steeper here on it and United likely got the last good deal.

Employment generation: United claims the orders will create 25,000 jobs over several years, although executives did not describe how they arrived at that figure. The airline has about 68,000 employees now.

The full range: United said it ordered 50 Max 8 jets, 150 slightly larger Max 10s, and 70 Airbus A321neos, which are larger still and usually seat 220 passengers in economy and premium.

Strategic play: The larger Airbus planes will be particularly valuable in San Francisco and Newark, New Jersey, where limited runways prevent United from adding more flights, said Andrew Nocella, United’s chief commercial officer.

Early retirement: About 300 of the planes will replace jets that United plans to retire by 2026, including most of its Boeing 757s, while 200 will be used for growth, Nocella said.

International route planes: Although the planes in the new order are all narrow, single-aisle jets designed for domestic flying, United also has pending orders for so-called widebody planes used on international routes, in anticipation for 2022 which is speculated to be a record year for US-Europe travel.

On the rise: US air travel has been slowly recovering since April 2020, when it dove below 100,000 people a day, equivalent to the 1950s level of flying.

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