United Airlines orders 270 jets to replace old ones, plan for growth

Business

File-This Nov. 18, 2020, file photo shows a Boeing 737 Max 9 built for United Airlines landing at King County International Airport – Boeing Field after a test flight from Moses Lake, Wash., in Seattle. United Airlines is placing a huge order for new planes so it can replace aging ones and prepare for growth as the pandemic subsides. United said Tuesday, June 29, 2021, that it will order 200 Boeing Max jets and 70 Airbus planes. (AP Photo/Ted S. Warren, File)

DENVER (NewsNation Now) — United Airlines said Tuesday that 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.

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

It is one of the largest orders ever for commercial planes and underscores that airlines see a recovery underway and expect to return to the profitability they enjoyed before the pandemic crushed air travel more than a year ago.

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 following two deadly crashes. The pandemic has hurt sales too.

Boeing “needs to play a bit of catch-up,” and so it likely gave United a steep discount, said George Dimitroff, analyst with Ascend by Cirium.

“From here forward, pricing will get firmer,” Dimitroff said. “I think that United is probably taking advantage of the last of the good pricing.”

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.

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.

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

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.

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, and Nocella predicted that 2022 will be a record year for U.S.-Europe travel.

Earlier this month, United announced it planned to relaunch supersonic travel before the decade is over with a plane that has yet to be built and the promise travel time could be cut in half for cross-continental flights.

The airline said it would buy ultra-fast jets from Denver-based aerospace company Boom Supersonic, bringing back supersonic passenger travel which died out with the retirement of the Anglo-French Concorde in 2003. The 15 “Overture” jets from Boom Supersonic will be purchased once they meet United’s safety, operating and sustainability requirements, with an option for an additional 35 aircraft.

The Denver-based company said the planes will be capable of speeds up to 1.7 times the speed of sound, or about 1,300 mph. That is slower than the previously used supersonic plane but much faster than current airliners, which generally have cruising speed around or slightly above 500 mph.

The tentative plan is to rollout the Overture in 2025, have the first flight in 2026 and supersonic passenger travel by 2029.

U.S. air travel has been slowly recovering since April 2020, when it dove below 100,000 people a day — a 1950s level of flying. The Transportation Security Administration screened nearly 2.2 million people on Sunday, the highest number in 15 months but still 18% below the comparable Sunday in June 2019.

Airports across the country are experiencing long lines as airlines readjust to the demand. Monday alone, the website Flight Aware calculated almost 7,000 delays and 3,000 cancellations.

The Associated Press contributed to this report.

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