United Airlines plans to add another 110 jets to its fleet by exercising its option to purchase 50 additional Boeing 787 jets and 60 additional Airbus A321neo jets. It has also obtained new options for even more jets.
United Airlines Orders 110 New Jets, Split Between 787 + A321neo
As part of its United Next initiative, United expects to take delivery of about 800 new narrowbody and widebody aircraft between 2023 and the end of 2032. That number now includes 110 new confirmed orders that United announced today.
United converted previous options and purchase rights into firm orders for 50 Boeing 787-9s for delivery between 2028 through 2031, as well as 60 Airbus A321neos for delivery between 2028 and 2030. Additionally, United secured new options for up to 50 more Boeing 787s and for an additional 40 A321neo aircraft. Both options would be effective late in this decade.
Addressing the order, United CEO Scott Kirby explained:
“We’re building a bright future at United and this order takes our already successful United Next plan into the next decade and beyond. Our planning and focus on the long term have helped us surge past other airlines that stood still. I’m convinced our strategy is the right one as we continue to add new, larger aircraft to take full advantage of our growing flying opportunities both internationally and domestically.”
On a media call this morning to discuss the new order, Andrew Nocella, United’s Executive Vice President and Chief Commercial Officer, hinted that these jets came at an attractive price (“best possible deal terms”) because United negotiated for them during the depths of the pandemic.
How This Order Impacts United’s Fleet Plan
On a long-term basis, United will not just grow its fleet, but replace its aging 767 and 777 fleet with Dreamliner jets. The 757 will be replaced with the Airbus A321XLR, which was not the focus of today’s A321 order. However, Nocella explained United can “accelerate or decelerate aircraft retirement to meet financial goals. We can deal with the cycles in that way.” By cycles, he meant the recessions or other unexpected events that may dampen demand and adversely skew growth forecasts.
While acknowledging the risk of recession and the need for flexibility, Nocella was bullish about long-term growth:
“This order and everything we do has customary flexibility and optionality to make sure that if there is a recession, we can tamper down growth as necessary, including accelerated retirement.”
Nocella made some other interesting comments which I will discuss tomorrow.
CONCLUSION
United’s confirmed aircraft order total has risen to 800 aircraft with the addition of 50 more 787 and 60 more A321neo jets.
This is a bold move. Will demand keep up? How effectively will United be able to handle a recession? Do the constant delays from Airbus and Boeing essentially give United the option to cancel these firm orders since there is little chance they will be delivered on time?
This is a developing story, but one that we will not see fully developed for years to come.
image: Stefan Kruijer / Airbus
This is fabulous news for United. For those who are going to argue that United is going to cripple their balance sheet, please remember that these deliveries will not occur for AT LEAST 5 years. (And yes – Delta is going to order new aircraft within the next 5 years but that a 350-1000 order has not come through yet)
Something interesting about this order- is United’s order for the 350-900 still on the books? It seems that essentially the current 787 order today just replaces the 350 order.
I am especially glad to see United doubling down on the a321 because it is the key plane to unlock growth and potential from United’s key getaway hub at Newark.
United has some very old airframes in its fleet. The B757 &B767 are over 25 yrs old. And a large portion of its A319 and A320 are near the 25 year mark.
United needs to move quickly or the bathtub curb of maintenance will come with a vengeance.