It was thought that the pandemic would have disastrous long-term effects on aircraft demand. We already saw that many carriers canceled or postponed orders since last spring. However, United Airlines is proving doubters wrong by finalizing the details of a deal worth up to $33 billion for 270 new narrowbodies.
A shift in momentum
Just today, United took delivery of its first Boeing 737 MAX 8 aircraft, and there are 40 more on order. The airline also placed an order for 100 MAX 10s. Now, it’s understood that hundreds of more single-aisle jets could be joining the Chicago-based carrier.
Reuters reports that the order could include up to 200 737 MAXs and 70 Airbus A321neos. This deal would give United a massive arsenal of the most efficient modern narrowbody types on the market. Moreover, the agreement would surpass Southwest Airlines’ recent order for a whopping 100 MAX aircraft and also be the biggest order across the industry since the rise of the global health crisis.
The 737 MAX has been the center of attention for the last two years following the type’s universal grounding amid two fatal accidents. It has since returned to the skies, providing hope for operators looking to deploy the jet across their networks. United already holds both 737 and A320 family aircraft and is looking to carry on putting its eggs in more than one basket with this diverse potential order.
Back on track
At list prices, the A321neo costs $129.5 million per unit, while the MAX 8 goes for $121.6 million. Nonetheless, airlines don’t necessarily pay list prices. Therefore, the overall order may check-in at a more attractive rate for United.
The news of this order comes as United announces that it expects to report a positive adjusted pre-tax income for next month. Shares of the firm are up 0.35% in premarket trading to $54.07. Following healthy passenger numbers across the United States in recent weeks, business is on the up for the carrier.
United shared the following, as reported by Seeking Alpha:
“The COVID-19 pandemic caused the most severe drop in demand for travel in the history of aviation and this expected performance would mark an important financial milestone as the company is turning its focus to the future of United Airlines.”
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Notably, this would be the first positive adjusted pre-tax income month since January last year. Following over a year of a significant downturn, aviation activity is seeing strong returns in the US. Long-haul activity is yet to bounce back consistently, but the domestic and short and medium-haul market is giving United enough confidence to invest heavily in new narrowbodies. The carrier is expected to reveal details during an investor event tomorrow.
Simple Flying reached out to United for comment on these reports. We will update the article with any further announcements from the airline.
What are your thoughts about United Airlines’ big money order? How do you feel these new planes would fit in the company’s fleet? Let us know what you think of the move in the comment section.