United Airlines Holdings Inc. 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.
(Bloomberg) — United Airlines Holdings Inc. 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 Tuesday in a release. The airline expects to take delivery of the Dreamliners beginning in 2024.
Along with the widebody order, United agreed to purchase another 56 Boeing 737 Max planes and exercised options for 44 of the workhorse narrowbody jet. 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 capitalize on a rebound in demand for long-range travel following a pandemic-driven slump.
United’s shares declined 1.7% as of 6:55 a.m. before regular trading in New York, while Boeing climbed 2.3%. United edged up 1.1% this year through Monday’s close, easily outpacing rivals American Airlines Group Inc. and Delta Air Lines Inc., 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 Officer Scott Kirby told reporters ahead of the announcement.
Sales Win
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. Bloomberg previously reported that United had planned to place a substantial order by the end of this year, culminating months of talks with Boeing and its chief rival, Airbus SE.
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.
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 lawmakers 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-fiber 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.
A350 Delays
The company first ordered the Airbus A350 and 787 in 2009, prior to a merger with Continental Airlines. Over the following decade, United nearly doubled its commitment for the Airbus jet to 45 but has repeatedly postponed the initial delivery. The airline said it has renegotiated the order and now plans to take delivery of the A350s no sooner than 2030.
The latest order expands United’s broader fleet overhaul about 18 months after it announced its biggest-ever deal for narrowbody jets. The carrier said then that it would take 200 Boeing 737 Max aircraft and 70 Airbus A321neo planes.
United said Tuesday that it expects to add about 700 narrow- and widebody planes over the next decade, with an average of more than two delivered every week next year and over three per week in 2024.
(Updates with share trading in fifth paragraph)
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