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United Airlines confirms order for 270 Boeing and Airbus aircraft

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United Airlines confirmed its largest order for Boeing and Airbus jets on Tuesday, lining up 270 jets worth more than $ 30 billion at list prices as the US giant chases post-pandemic domestic growth.

The 200 Boeing 737 MAX and 70 Airbus A321neo jets will replace the smaller main jets and at least 200 regional jets between 2022 and 2026, the Chicago-based airline said.

United is the US airline most exposed to international travel, having suffered greatly during the coronavirus pandemic and is recovering more slowly than domestic travel.

The third-largest airline in the United States by revenue will be able to increase the number of seats in its national network, which lags behind major rivals, by almost 30% and make better use of hubs with the reorganization of the fleet.

United Chief Executive Scott Kirby said it would “accelerate our business to meet a resurgence in air travel.”

The order, which confirms a detailed breakdown reported by Reuters on Monday, includes 50 Boeing 737 MAX 8s and 150 MAX 10s, accelerating the MAX’s recovery in the wake of a two-year security crisis overlapping with a crash and tick. of COVID-19 travel. what industry sources called a partial blow to Boeing.

However, its victory over Airbus in the number of units sold was tempered by the continued control of Europe in a lucrative segment of the largest and longest-range single aisles like the A321neo.

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The MAX 10, which made its first flight this month, is the largest member of the MAX family and has a capacity of 230 seats.

The Airbus A321neo is slightly larger and has more range, giving United additional capacity at restricted airports like Newark and San Francisco that play a key role in its growth plans.

“That is one of the main reasons why the order includes both types of aircraft,” said commercial director Andrew Nocella.

Boeing shares rose 0.9% in pre-market trading. In Europe, Airbus shares rose 0.2% mid-session.

CONVERSION RIGHTS

Combined with its current order book, United will receive 500 new narrow-body aircraft, including 40 in 2022 and 138 in 2023. It has flexibility in the remaining deliveries between 2024 and 2026 and the option to convert some of the MAX 10 orders to others. variants. a spokesperson said.

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The new Boeing and Airbus aircraft will include new interiors as part of an extensive cabin overhaul.

United, which unlike major rivals did not recall aircraft during the pandemic despite having one of the oldest fleets in the US, said it plans to fly the first MAX 8 with the new interior this summer and the MAX 10 and A321neo in early 2023.

The order includes 25 737 MAX “white tails”, or orders canceled by other buyers during a long safety ground.

The airline, which received $ 10.5 billion in government aid during the pandemic, dedicated much of its launch to a pledge to create 25,000 unionized jobs as part of the purchase.

With the transaction, United’s use of 50-seat jets will be reduced to less than 10% of its domestic departures compared to about a third today, Nocella said.

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The order also serves to replace United’s old fleet of Boeing 757-200s, although the airline has not yet decided on a replacement for its 757-300s, he told reporters.

Boeing, which was required by regulators to add MAX simulator training for pilots of earlier 737s after software problems contributed to fatal MAX crashes, said United’s deal includes training simulator data packages.

Airbus said a significant number of the newly ordered A321neo jets will be assembled at its Mobile, Alabama plant. (Reporting by Tracy Rucinski and Eric M. Johnson; Additional reporting by Tim Hepher, Ankit Ajmera; Edited by Jason Neely and Alexander Smith)

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In-depth reports on the economics of innovation from The Logic, presented in association with the Financial Post.

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