United Airlines Places Its Largest Purchase Order Ever, To Buy 270 Jets From Boeing, Airbus

United Airlines

Coronavirus pandemic brought the aviation industry to a standstill. But things have been changing for the better as the number of new cases subsides and several parts of the world and more and more people getting vaccinated against the disease. Set to rebound, United Airlines has placed the largest aircraft purchase order in its history. The airline is set to buy 270 jets with a list price of around USD 35 billion This is the biggest order by United Airline in about a decade. Usually, airlines pay only a fraction of list prices. As this is not a good time for the manufacturer of aircraft, the major American airline will be paying far less than the list price. The bulk of the order is for Boeing 737 Max jets and United is likely to these at a significant discount. The rest of the order for aircraft is for 70 Airbus. The recent is order another hint that the aviation industry sees recovery from the coronavirus pandemic. United Airlines has recently told investors it is hopeful of posting an adjusted pre-tax profit in July. If this happens, it will be the first airline to do so after the Covid-19 pandemic. This comes at a time when leisure travel is almost back to normal. More and more and international flights have resumed and this has given airlines an opportunity to lift fares.

Experts feel that United is getting a good deal from Boeing on 737 Max. “This shows how savvy United Airlines is when it comes to buying planes. The airline is definitely getting a good deal. If they were not sure about the good return, they would not have done it,” Ron Epstein was quoted as saying in a report. United is buying these aircraft to replace smaller planes. The airline has around 200 smaller regional jets with a passenger capacity of 50 each. This will help the airlines to increase the capacity at any given route without adding any extra flights. This will be really helpful at airports like Newark and San Francisco which has a strict rule when it comes the number of takeoffs and landings of airlines. The aircraft acquired under the deal will also replace about 100 older full size planes. United Airlines chief executive officer Scott Kirby said that there are passengers who don’t like smaller planes and this will bring smiles to their faces.

“There are 50 seats regional jets between Newark and Atlanta or Chicago and Dallas. We have competition with people which are providing passengers much better product. We had effectively no chance to compete with them. This order is about changing that thing. The deal is about to offer better products to our customers and create a domestic network,” said Kirby. A third of domestic flights operated by United Airlines use regional jets. After the deal, the figure is expected to cut down to 10 per cent. United has a long list of orders as there are expectations for a rebound in business. With the recent deal, the airline has orders for 500 new jets. Out of them, it is hopeful of receiving 40 planes next year and another 132 in 2023. This is a stunning change from the situation airlines faces a year ago when they had to park planes because of the coronavirus pandemic. All major airlines had halted aircraft purchases and deliveries. This year too, the deliveries of jets are just a fraction of what it was before the pandemic. But many airlines have announced the purchase of planes of late. Like United Airlines, Delta and Southwest too have made similar announcements.

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Steven Burnett
Being one of the leading news writers of the dailyheraldbusiness, Steven holds a specialization in the domains of business and technology. The passion he has for the new developments in the connected devices, cloud technology, virtual reality, and nanotechnology is seen through the latest industry coverage which is done by him. His take on the consequences of digital technologies across the world gives his writing a modern and fresh outlook.