It has now been confirmed, after weeks of speculation, that United Airlines has placed a mammoth order of 270 narrow-bodied jets, spread across both Boeing and Airbus, in a deal worth over US$30 billion.
Update: Both Boeing and Airbus have confirmed the new orders, which marks the largest aircraft order in the airline’s history.
The deal is confirmed to include a total of 70 Airbus A321neo aircraft, as well as 200 Boeing 737 MAX jets.
The Boeing order includes 150 of the not-yet-certified 737-10, the largest variant of the MAX family, as well as 50 classic 737-8 jets.
“Our ‘United Next’ vision will revolutionize the experience of flying United as we accelerate our business to meet a resurgence in air travel,” said United CEO Scott Kirby.
“By adding and upgrading this many aircraft so quickly with our new signature interiors, we’ll combine friendly, helpful service with the best experience in the sky, all across our premier global network.
“At the same time, this move underscores the critical role United plays in fueling the broader U.S. economy – we expect the addition of these new aircraft will have a significant economic impact on the communities we serve in terms of job creation, traveler spending and the shipping of goods and services.”
Speaking of United’s order of 70 Airbus A321neo jets, Airbus Chief Commercial Officer and Head of International Christian Scherer said, “Such a significant order from a great airline like United underscores that the A321neo offers unmatched capabilities, operating economics, and passenger friendliness.
“No other aircraft can do what the A321neo can do, and the Airbus team is most gratified by United’s strong affirmation of its premium status. The A321neo will complement United’s future A321XLR aircraft, together creating a privileged segment on its own.”
Meanwhile, Stan Deal, president and CEO of Boeing Commercial Airplanes, said, “We are truly humbled by United Airlines’ confidence in the people of Boeing and the airplanes we design and build every day.
“Our strong partnership, dating back to United’s founding, has helped us grow and weather challenges through the decades. As we look forward to the recovery ahead, we are honored that United has once again chosen the 737 family’s performance, efficiency and flexibility to power their growing network.
“The Boeing team is excited to be building hundreds of these new jets for United and delivering on a landmark agreement that solidifies our future together for the next decades.”
Earlier: According to a Reuters report, industry sources have said the orders could consist of 200 Boeing 737 MAX jets and around 70 Airbus A321neo jets, which are each other’s prime competition.
At market-rate, the deal would be worth over US$33 billion, however, analysts say airlines can often pay less than half of the original price of aircraft involved in a deal this large.
The deal, split between Boeing and Airbus, highlights the ongoing rivalry between the planemakers.
The 737 MAX and A320 family have been in competition for years, both similar in nature, but have a few fundamental differences, such as cabin width, seating, and less superficial characteristics including aircraft shape and engine type.
While this order for the MAX would be significant after the 20-month grounding of the jets following the 2018-19 accident killing 346 passengers, industry sources explain the split order convey the MAX “can’t solve the whole problem” – especially as trust in Boeing is still being rebuilt.
Therefore, that “could mean only two versus three cheers for Boeing” as the A321neo is “Boeing’s nemesis at the top end of the narrow-body market with a dominant market share”, Vertical Research Partners analyst Rob Stallard wrote.
The extended grounding of the MAX allowed Airbus to surpass Boeing in new orders for narrow-bodied aircraft, while cancellations soared for the US planemaker.
Though the fight hasn’t always been in Airbus’ favour. In march, Southwest Airlines confirmed it would purchase 100 737 MAX jets, in the largest purchase deal since the plane’s grounding, after considering a move instead to the Airbus equivalent.
Following Southwest, this United order shows Boeing is bouncing back from the lost customer trust since the accidents, especially as the planemaker undergoes comprehensive tests for safety.
Boeing’s largest 737 variant, the MAX 10 jet, completed its first successful flight a few weeks ago, as part of the test program, which will work closely with regulators for expected entry into service in 2023.
However, the Airbus A320 family has also received safety advice as the European Union Aviation Safety Agency (EASA) ordered last week that additional inspections be made for the aircraft after extended grounding due to the pandemic.
The safety directive highlighted the groundings have caused a number of operational issues with airspeed functionality.
This large order from United also follows a deal with Denver-based Boom Supersonic for the purchase of 15 of its supersonic commercial passenger jets, in a deal worth over US$3 billion.
United is overall one of the industry’s most important customers, especially as the airline continues investing enormous sums of money despite financial deficits since the pandemic.
Additional reporting by Hannah Dowling.