United Airlines Holdings Inc yesterday announced a huge new plane order with Boeing Co and Airbus SE in the biggest bet thus far by a major carrier on a travel industry recovery after the COVID-19 pandemic.
The US carrier plans to acquire 270 new planes consisting of 200 Boeing aircraft and 70 Airbus jets.
The order would be valued at US$35.4 billion based on the listed price of the jets, although airlines often end up paying much less than the list price.
Photo: AFP
United Airlines executives described the order — the biggest in the airline’s history — as a landmark moment symbolizing the radically improved outlook for travel due to vaccines.
Still, United Airlines and other major airlines are expected to report another quarterly loss for the April-to-June period when they release their earnings reports next month, reflecting the continued drag of a travel crisis that has devastated revenue for more than a year.
United Airlines’ business travel volumes are still down 60 percent, with international travel off even more, United chief executive Scott Kirby said.
“We’re not back to 100 percent,” Kirby said on a conference call with reporters in which he outlined how the company leaders had strategized on its needs early in the pandemic.
“Because we accurately mapped out the trajectory of the crisis in March and April of last year, it’s really allowed us to be prepared and make the right short and long-term decisions,” he said.
The biggest component of the order is to be 150 of Boeing’s new 737 MAX 10s, a model that is still undergoing tests in a process closely monitored by US regulators.
The announcement is a victory for Boeing’s jet, which was grounded for 20 months following two deadly crashes.
The other two components are 50 Boeing 737 MAX 8s and 70 Airbus A321neos.
All three models are narrow-body jets, making them well-suited for domestic and shorter-distance trips that have been among the first to see passenger numbers recover.
The Airbus model and the next-generation 737 MAX are bigger than earlier versions of the same aircraft, a feature especially beneficial for increasing capacity in New York, San Francisco and other markets where adding more flights is difficult or impossible, United Airlines officials said.
United Airlines officials said during the conference call that they have seen recent signs of an acceleration in business travel bookings, with firms eager to resume client visits as they see their competitors returning to the skies.
Executives also said they were bullish about international travel, speaking of the summer of next year as being a “record breaker” as US consumers make up for lost opportunities during the pandemic to visit Europe and Asia.
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