There’s certainly cause to celebrate United Airlines’ new A321XLR deal. The order is pivotal in rejuvenating the air carrier’s fleet but United Airlines also expressed interest in the yet-to-be-executed Boeing 797 or NMA. Will this recent order thwart Boeing’s chances of securing any 797/NMA orders from United Airlines?
United places Airbus orders over Boeing 797 concept
It was back in April that speculation began about United Airlines’ potential deal with Airbus. The airline was rumored to be in talks with the airframe manufacturer for A321XLR aircraft to replace its aging Boeing 757 fleet.
But now all speculation has been dispelled. Yesterday (3rd December 2019) the airline confirmed it had ordered 50 A321XLR to replace its Boeing 757s. It’s all welcome news for United Airlines but is this order bad timing for Boeing whilst it continues its toil to provide an exciting NMA/797 for the market?
The answer to that question is: potentially. Certainly, at the moment the stakes don’t look good for Boeing with a potential customer swinging in favor of a competitor. But it wouldn’t be right to say that the fight is over. United Airlines has reasons for choosing the Airbus, including the interest of time, but it’s also not completely ruled out the Boeing 797.
The A321XLR fills the gap
First, let’s take a look at the evidence that suggests the A321XLR order will impact United’s future with the 797/NMA.
Irrevocably clear is the fact that United has chosen Airbus to replace Boeing aircraft. According to Planespotters, the airline has 74 Boeing 757 aircraft most of which will now be retired and supplanted from 2024. So an order of 50 Airbus aircraft is going to completely revolutionize that portion of the fleet.
United Airlines has not, for obvious reasons, ordered a small number of A321XLR. In fact, it’s grown impatient in needing a replacement and Airbus is the manufacturer that can guarantee it faster. If we look at Boeing’s track record with delays in the 737 MAX and 787, it’s already working on a backlog of orders, even without the development of the 797. For a fleet that only grows older by the day, it makes sense for United to invest in Airbus now.
What’s more, United already has some Airbus aircraft in its fleet, with more on order. These new additions could allow the airline to see the potential in investing more heavily in Airbus in the future. In fact, the A321XLR does a good job of providing what United Airlines was looking for. The aircraft has a range of 4,700nm which is only 300nm less than the proposed 5,000 from Boeing’s NMA/797. There might be unexplored Airbus potential which United has not tapped into. And that’s worrying for Boeing.
But the aircraft also provides for United in terms of strategy. In a press release, the Executive Vice President and Chief Commercial Officer at United Airlines said:
“In addition to strengthening our ability to fly more efficiently, the A321XLR’s range capabilities open potential new destinations to further develop our route network and provide customers with more options to travel the globe.”
So when it comes to replacing its 757 fleet, United has already filled that gap. It might look dismal but let’s not forget that United Airlines wasn’t expecting the Boeing 797/NMA to come soon. Perhaps the 797/NMA was never a serious contender for the speed with which United wanted to replace its fleet. But, it does still have an aging 767 fleet it wants to retire…
Is there still hope for Boeing 797/NMA orders?
In an interview reported by Flight Global earlier this year, the Chief Financial Officer at United said that the airline had not totally ruled out Boeing by any stretch. Before the A321XLR order, Gerry Laderman said:
“The XLR doesn’t solve the 767 replacement issue.”
And to further back up the suggestion that United is still interested in investing in Boeing’s 797, the airline said it was under no pressure to make a quick decision. In the same report by Flight Global, Laderman told investors that:
“We would like to see some clarity so we can make the choice [on investment in Boeing’s 797/NMA], but we do have a little time; we can wait.”
And it’s playing the waiting game because Airbus has not developed an exact NMA/797 alternative. Boeing’s model still plays to a niche that has not yet been filled. There is still value in this aircraft and it could be a genuine option for the airline.
However, Laderman’s comment came back in July and there’s still no release date for the 797/NMA. Which prompts the question: how long exactly has United Airlines given itself to wait for Boeing?
Ultimately, United Airlines’ need for new aircraft has come at a bad time for Boeing. With an order already secured with Airbus, its apparent that Boeing won’t be getting as many orders as it would have hoped from United. But that’s not to say that it won’t get any.
However, Boeing must also be aware that the world is waiting and not just for it to deliver the NMA/797. The sooner it can coordinate the delivery of all of its pending aircraft, the better. In United’s case, it entirely depends on whether another aircraft manufacturer can produce an aircraft that can do a sufficient job of what the 797/NMA hopes to or not. That will ultimately determine where it invests its capital.
Do you think the United A321XLR order will affect the Boeing 797? Let us know in the comments!