Monday, May 27, 2024

United Airlines Expands Its Fleet, Securing 35 Airbus A321neos Amid Shift from Boeing 737 Max 10

United Airlines is set to enhance its aircraft lineup by acquiring 35 Airbus A321neos from next year, distancing itself from the Boeing 737 Max 10s originally planned for its fleet. This strategic decision, announced alongside the airline’s first-quarter financial results on April 16, aims to ensure a steady supply of about 100 narrowbody jets annually from 2025 through 2027.

United Airlines, headquartered in Chicago, is gearing up for a significant expansion of its narrowbody fleet, having entered into agreements with two aircraft lessors for the procurement of the A321neos. These new aircraft, powered by CFM International Leap-1A engines, will help the airline maintain a predictable delivery timeline amidst ongoing industry uncertainties.

The specifics of the leasing deals, including the names of the lessors and the financial terms, remain undisclosed. However, United’s CEO, Scott Kirby, highlighted the adaptation of the airline’s fleet strategy to align with current manufacturing capabilities. “This revised fleet strategy allows us to exploit unique growth opportunities, enhancing our service at mid-continent hubs and boosting our highly lucrative international routes,” Kirby explained.

This move also deals another significant setback to Boeing’s Max 10 program, which is currently stalled in certification processes. Last month, Kirby had hinted at this pivot to Airbus owing to delays in the certification of Boeing’s largest narrowbody model, which is now expected no earlier than 2025.

United’s current fleet includes seven A321neos, with 173 more on order, as per data from aviation consultancy Cirium. Despite these new Airbus commitments, United maintains a robust order book for Boeing’s 737 Max series, including nearly 350 aircraft, with a mix of Max 9s and the troubled Max 10 variants. The airline has options to revert some orders to Max 10s contingent upon eventual FAA certification.

Amidst manufacturing and certification delays that have plagued United’s fleet expansion, the airline had previously projected the delivery of 183 narrowbody jets in 2024 but had to adjust expectations down to about 100. The recent FAA grounding of some Max 9s operated by Alaska Airlines, following a mid-flight incident, has further influenced these adjustments.

Looking forward, United anticipates the arrival of 61 narrowbody and five widebody jets this year, slightly adjusting service entry from the second to the third quarter for a few aircraft, a shift expected to minimally impact overall capacity plans.

Reflecting on the financial aspects, United reported a first-quarter loss of $124 million, an improvement over the $194 million loss from the same quarter last year. Revenue saw a near 10% increase, reaching $12.5 billion. The airline noted that the results were impacted by approximately $200 million due to the Boeing 737 Max 9 groundings, without which it would have posted a profit.

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