NEW YORK (AFP) – United Airlines announced the largest order in its history on Tuesday, unveiling major purchases from Boeing and Airbus in a significant bet on the travel industry’s recovery from Covid-19.
The United Sattes (US) carrier plans to acquire 270 new planes consisting of 200 Boeing aircraft and 70 Airbus jets, in an order valued at USD35.4 billion based on the listed price of the jets, although airlines often end up paying much less than the list price.
United executives described the order as a landmark moment symbolising the radically improved outlook for travel due to access to coronavirus vaccines.
Still, United and other major airlines are expected to report another quarterly loss for the April-June period when they release their earnings reports in July, due to the continued drag from the crisis that has devastated travel revenue for more than a year.
United’s business travel volumes are still down 60 per cent, with international travel off even more, United Chief Executive Scott Kirby said.
“We’re not back to 100 per cent,” Kirby said during a conference call with reporters in which he outlined how the company leaders had strategised early in the pandemic.
During the hour-long conference call, company officials were not asked about the so-called Delta virus variant – which is spreading rapidly in many parts of the world leading to some renewed restrictions – but the announcement illustrates broad confidence in the industry’s prospects even as the pandemic evolves. Investors initially cheered the announcement, but United finished down 0.7 per cent. Boeing and Airbus also finished lower following a choppy session.
The biggest component of United’s order is for 150 of Boeing’s new 737 MAX 10, which is still undergoing tests in a process closely monitored by US air safety regulators. The announcement is a victory for Boeing, after the jet was grounded for 20 months following two deadly crashes. The order also includes 50 Boeing 737 MAX 8 and 70 Airbus A321neo planes.
All three models are narrow-body jets, making them well-suited for domestic and shorter-distance trips that have been among the first to see passenger numbers recover from the Covid-19 pandemic.