United Airlines Holdings agreed to buy 100 Boeing Co 787 Dreamliners as part of a multibillion-dollar order for as many as 300 new aircraft, revamping the carrier’s fleet with one of the largest plane deals in recent years.
The pact includes 100 firm orders for the widebody model along with options to add another 100, the companies said on Tuesday in a release. The airline expects to take delivery of the Dreamliners from 2024.
Along with the widebody order, United agreed to purchase another 56 Boeing 737 Max aircraft and exercised options for another 44 of the workhorse narrowbody jets. Deliveries are expected between 2024 and 2028, it said.
The blockbuster deal, coming about 18 months after United placed the largest single-aisle order in its history, ensures a steady flow of aircraft at a time when newly built jetliners are increasingly hard to line up. It also bolsters the carrier’s widebody fleet as it looks to capitalise on a rebound in demand for long-range travel following a pandemic-driven slump.
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United’s shares declined 1.7 per cent before regular trading in New York, while Boeing climbed 2.3 per cent. United edged up 1.1 per cent this year through Monday’s close, easily outpacing rivals American Airlines Group and Delta Air Lines, which are each down by double digits.
“United is really uniquely positioned to grow in a way that will be a huge challenge for others,” chief executive Scott Kirby told reporters ahead of the announcement.
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The sales win bolsters Boeing’s plan to speed up the 787’s manufacturing pace as the planemaker recovers from a lengthy halt in deliveries.
Financial terms of the deal weren’t disclosed, and the companies didn’t specify the mix of variants of the Boeing planes United would take. Based on estimates by Bloomberg Intelligence of the value of the Max 8 and the 787-9, the firm portion of United’s order could be worth more than $17 billion (€16.1 billion).
United is loading up on Boeing’s largest narrowbody model, taking another 80 Max 10 aircraft even though the timing of the jet’s market debut is in question. That carries risk for the airline, since that plane has yet to receive federal certification and it is nearing a deadline that could force Boeing to redesign the safety alerting system.
The planemaker could receive an extension if politicians include it in a government spending bill, and United executives said they were confident they would be able to receive the airplanes from Boeing.
United’s widebody purchase will trim the carrier’s fuel bills by swapping the efficient, carbon-fibre 787 for its aging 767 and 777 aircraft. The airline has 128 twin-aisle Boeing jets that have been flying for at least 20 years, according to Cirium data.
United operates an all-Boeing widebody fleet and has been reluctant to introduce other models that would increase maintenance and pilot-training costs. The latest deal will make the Dreamliner the mainstay of the carrier’s long-haul fleet. – Bloomberg
