United orders 270 jets, biggest aircraft purchase ever – .

United orders 270 jets, biggest aircraft purchase ever – .

The list price of the 270 jets is approximately $ 35 billion. Airlines typically pay only a fraction of list prices, and now isn’t a good time for aircraft sales, which likely means United is getting a big discount, especially on the Boeing (BA) 200 737 Max jets which constitute the bulk of the order. The rest of the order is for 70 Airbus (EADSF) Aircraft A321neo.

Monday, Uni (UAL) told investors he planned to post adjusted pre-tax profit in July, the first sign of profitability for United or any major airline since the start of the Covid-19 pandemic. Demand for leisure travel has almost returned to normal, helping to push up fares, although more lucrative business travel and international flights are still only a fraction of what they were before the pandemic.

“It’s a sign that United are a savvy buyer of planes,” said Ron Epstein, aerospace analyst for Bank of America. “I’m sure they’re getting a good deal on Max’s. But if they didn’t feel comfortable enough with the return of the flight market, they wouldn’t. “

United will use most of the jets to replace 200 small regional jets carrying around 50 passengers each, allowing them to increase capacity without adding flights to airports such as Newark and San Francisco, which limit each take-offs and landings. airline company. It will also replace around 100 older full-size planes.
Including Tuesday’s orders and the previous orders they had on the books, United now have orders for 500 new jets coming over the next few years, of which 40 are expected to be delivered next year and 138 in just 2023.

Plans to add 25,000 jobs

United plans to add around 25,000 jobs over the next five years to the 68,000 front-line positions it currently has, by hiring pilots, flight attendants, mechanics, door attendants and other personnel. staff needed to manage the increase in the number of passengers it expects.

The airline cut about 22,000 employees last year during the crisis, although it has already recalled some of those employees to deal with an increase in leisure travel.

This is by far the largest order for the 737 Max since it was grounded for 20 months from March 2019 following two fatal crashes that left 346 people dead.

South West (FILL), which owns more Max jets than any other airline, has ordered an additional 134,737 Max since the Federal Aviation Administration cleared the plane to fly again. But even with Tuesday’s United orders, Boeing has failed to recover the more than 1,000 canceled orders for its best-selling jet since the March 2019 grounding.

So even though this is an important vote of confidence for Boeing and the 737 Max, demand for aircraft is still relatively low, depressing the prices that aircraft manufacturers can charge. Boeing has slowed production of its planes, closed a factory in Washington state that had built the widebody 787 Dreamliner and downsized.

United had already placed orders for 50 additional 737 Max jets since the tie-up was lifted last November – 25 of which were among those built during the tie-up but were never delivered as the original orders were canceled.

United also announced that it will revamp the interiors of all of its existing full-size jets, adding seat-back entertainment systems, larger luggage compartments and more “economy plus” seats providing additional space for passengers. legs – and higher rates.


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