United Air Seen Finalizing Its Largest-Ever Narrow-Body Jet Deal

United Airlines Holdings Inc. is poised to buy more than 200 Airbus SE and Boeing Co. jetliners, one of the largest purchases in its history, as the U.S. carrier revamps its single-aisle fleet with more efficient planes, according to people familiar with the plans.

While terms are still being finalized and the order size is in flux, the total deal has expanded from that first reported by Bloomberg News earlier this month, said the people, who asked not to be identified as the talks are confidential.

United is expected to take upwards of 150 of Boeing 737 Max jetliners and more than 50 Airbus A321neos, they said. The deal will be showcased during investor and media events scheduled for Tuesday by the Chicago-based carrier.

The order highlights the vigor with which demand for new jets has snapped back in the U.S. following the historic collapse in air travel last year as the coronavirus pandemic swept the globe. United ordered 50 of Airbus’s long-distance A321XLR model in 2019 and has accelerated deliveries from previous Max orders to capitalize on Americans’ surging demand for leisure travel.

The fleet strategy also furthers United Chief Executive Officer Scott Kirby’s goal of reducing the carrier’s carbon emissions and becoming an industry innovator battling climate change.

‘Good Pricing’

The airline could expect to benefit from “good pricing” in refreshing its fleet when there is “relatively limited competition for new delivery slots” following the pandemic, said Rob Morris, head of aviation consulting services at Cirium.

A deal with Boeing would expand on an order for 25 Max jets that United announced in March, and likely include a mix of Max 8s and 9s to replace older 737-800s and -900s, Morris said.

Even with a slew of 737 orders, a parallel deal for Airbus’s A321XLR to replace Boeing 757s, United’s oldest and largest single-aisle jets, would come as a blow to the U.S. planemaker and add to pressure to fill the mid-range gap in its commercial jet line-up.

United has 71 of the planes, many dating from the mid-1990s, including 21 757-300s, a slightly longer version acquired by Continental Airlines before it merged with United, according to Cirium data. United has 32 757s in storage, mostly the 757-200 variant.

Potential Customer

The airline had been viewed as a potential launch customer for the NMA, the all-new airliner that the U.S. manufacturer set aside last year as it worked to end a global grounding of the Max after two fatal crashes.

United operates 757s among its domestic hubs and to Hawaii, along with some trans-Atlantic routes from the East Coast. It already plans to migrate some of routes to the coming A321XLR, which hasn’t yet entered service, after the initial order. Deliveries to the airline are set to begin in 2024.

The longest-range A321 has become the industry’s de facto replacement for the out-of-production 757, a jet that has served less busy trans-Atlantic routes for carriers such as United, Delta Air Lines Inc. and Icelandair Group.

©2021 Bloomberg L.P.

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