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United Airlines Orders 110 Planes from Airbus and Boeing

United Airlines is set to unveil a substantial order of 110 planes including 50 widebody 787 Dreamliners from Boeing and 60 A321 narrowbody jets from Airbus, sources close to the matter confirmed on Tuesday. 


Following the announcement, early morning trading witnessed a surge in both Boeing and Airbus shares, reflecting the positive sentiment surrounding the deal. This surge in demand for widebody jets, exemplified by Air Canada’s recent acquisition of 18 Dreamliners and Air France-KLM’s order of 50 A350s, has marked a notable rebound in the sector over the past month.


Similarly, the demand for narrowbody jets, particularly the larger A321 model, has been on a steady ascent. Richard Aboulafia, the managing director of AeroDynamic Advisories, described this trend as “the great convergence towards the middle,” indicating a notable shift in market dynamics.


Despite concerns regarding weakened pricing power in United’s domestic market and uncertainties surrounding travel demand in the event of a potential recession, analysts remain cautiously optimistic. The airline industry’s ability to bounce back, even in the face of economic uncertainty, has been a testament to its resilience.


This latest procurement from United represents the second major aircraft acquisition within the past year. As a result, Boeing and Airbus have experienced an uptick in their order backlogs, causing jet deliveries to extend towards the end of the decade. In December, United revealed a substantial order for 100 Dreamliners and 100 737 MAXs to meet the escalating demand as pandemic-related restrictions eased.


The acquisition of nearly 700 jets by 2032, an estimated expenditure of $50 billion according to Jefferies, has raised concerns among analysts. Broken supply chains have also been identified as a factor contributing to shortages of new aircraft, intensifying the urgency for airlines to place large orders.


In spite of the uncertain economic outlook, industry experts argue that the current climate offers an opportune moment for airlines to invest in new aircraft. Richard Aboulafia emphasized, “Airlines are locking in good deals now,” underscoring the favorable conditions for procurement.


The comprehensive order of United Airlines comprises 60 A321 narrowbody jets from Airbus and 50 787 Dreamliners from Boeing. The move not only positions United Airlines to meet the evolving demands of its clientele but also underscores the aviation industry’s resilience and adaptability in navigating complex market conditions.

Source: Reuters

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