United buys 100 Boeing 787s in bet on long-haul rebound

Bloomberg

United Airlines Holdings Inc agreed to buy 100 Boeing Co 787 Dreamliners as part of a multibillion-dollar order for as many as 300 new aircraft, revamping the carrier’s fleet with one of the largest plane deals in recent years.
The pact includes 100 firm orders for the widebody model along with options to add another 100, the companies said in a release. The airline expects to take delivery of the Dreamliners beginning in 2024.
Along with the widebody order, United agreed to purchase another 56 Boeing 737 Max planes and exercised options for 44 of the workhorse narrowbody jet. Deliveries are expected between 2024 and 2028, it said.
The blockbuster deal, coming about 18 months after United placed the largest single-aisle order in its history, ensures a steady flow of aircraft at a time when newly built jetliners are increasingly hard to line up. It also bolsters the carrier’s widebody fleet as it looks to capitalise on a rebound in demand for long-range travel following a pandemic-driven slump.
“United is really uniquely positioned to grow in a way that will be a huge challenge for others,” Chief Executive Officer Scott Kirby told reporters ahead of the announcement.

Sales Win
The sales win bolsters Boeing’s plan to speed up the 787’s manufacturing pace as the planemaker recovers from a lengthy halt in deliveries. Bloomberg previously reported that United had planned to place a substantial order by the end of this year, culminating months of talks with Boeing and its chief rival, Airbus SE.
Financial terms of the deal weren’t disclosed, and the companies didn’t specify the mix of variants of the Boeing planes United would take. Based on estimates by Bloomberg Intelligence of the value of the Max 8 and the 787-9, the firm portion of United’s order could be worth more than $17 billion.
“There is no doubt this order needed to happen, but elevated leverage is a substantial headwind going forward,” Jefferies analyst Sheila Kahyaoglu said.
United is loading up on Boeing’s largest narrowbody model, taking another 80 Max 10 aircraft even though the timing of the jet’s market debut is in question. That carries risk for the airline, since that plane has yet to receive federal certification and it is nearing a December 27 deadline that could force Boeing to redesign the safety alerting system. The planemaker could receive an extension if lawmakers include it in a government spending bill, and United executives said they were confident they would be able to receive the airplanes from Boeing.
The Max 10 will “probably get certified some time next year,” Kirby said. “It’s the right safety outcome. You don’t want to have the same aircraft with different cockpits.”
United’s widebody purchase will trim the carrier’s fuel bills by swapping the efficient, carbon-fiber 787 for its aging 767 and 777 aircraft. The airline has 128 twin-aisle Boeing jets that have been flying for at least 20 years, according to Cirium data.
United operates an all-Boeing widebody fleet and has been reluctant to introduce other models that would increase maintenance and pilot-training costs. The latest deal will make the Dreamliner the mainstay of the carrier’s long-haul fleet.