United Airlines (NASDAQ: UAL) placed a firm order for 100 Boeing (NYSE: B.A.) 787 Dreamliners and an option to purchase 100 more, it announced Tuesday.
The aircraft order is the largest ever placed by a U.S. commercial carrier for widebodies, United said. Deliveries are expected to begin between 2024 and 2032, and United will have the option of choosing among 787-8, -9, or -10 models.
In the same announcement, United also said it exercised options to purchase 44 Boeing 737 MAX aircraft for delivery between 2024 and 2026, keeping its United Next 2026 capacity plan, and ordered 56 more MAX aircraft for delivery between 2027 and 2028.
Altogether, the major carrier is expecting to take delivery of around 700 new narrow- and widebody aircraft by the end of 2032. The aircraft volume will average more than two deliveries each week in 2023, with more than three each week in 2024, it said.
Training and Hiring Pilots
Earlier this year, in June, the airline announced that it would spend $100 million to expand its pilot training center in Denver, Colorado, and allow it to streamline its operations. The airline is planning to hire 10,000 pilots by 2030. At the time, the company said it would add a new four-story building on the 23-acre campus in Denver’s Central Park neighborhood to house 12 additional advanced flight simulators, training classrooms, conference rooms, and offices. It is expected to be completed by the end of 2023.
Of the 10,000 pilots, the airline will train 5,000 pilots through 2030 at its United Aviate Academy, which opened in the spring, with a commitment to ensuring that half of those trainees are women or people of color.
In a social media post, United CEO Scott Kirby said the airline was the only one to negotiate a deal with its pilots’ union to keep all pilots current and in place. Pilots at many carriers have been at odds with management over old contracts as they look to negotiate for better pay and benefits.
United said around 100 new widebody jets would replace older Boeing 767s and 777s. By 2030, United will remove all 767s from the airline’s fleet. The airline said the move would be beneficial because newer aircraft are expected to decrease carbon emissions by 25 percent per seat compared to the older jets.
Is Boeing Back?
The news is a boost for Boeing, which has had a year of ups and downs as it looks to regain its pre-pandemic high. It’s also another vote of confidence in the MAX program by another major U.S. carrier. Delta Air Lines (NYSE: DAL) ordered 100 737 MAX 10s at the 2022 Farnborough International Airshow in July.
“With this investment in its future fleet, the 737 MAX and 787 will help United accelerate its fleet modernization and global growth strategy,” Stan Deal, president, and CEO of Boeing Commercial Airplanes said in a statement.
Following the announcement, Moody’s, which assigns credit ratings to companies based on risk assessments, signaled to the market that United’s order was a good sign. “Today’s order by United Airlines for new Boeing aircraft is a boon to Boeing and its Commercial Airplanes segment,” Jonathan Root, senior vice president for Moody’s Investors Service, said in a statement.
The order’s value is estimated to be worth approximately $16 billion, even with discounts and accounting for inflation, Root said.
“Importantly for Boeing, with this order, United becomes the second of the U.S. Big Three airlines to commit to operating an all-Boeing widebody fleet. American Airlines (NASDAQ: AAL) is the other,” Root said. “Boeing’s 787 backlog is currently about 420 aircraft. The United order increases this backlog by almost 25 percent. The MAX order adds to the current MAX backlog of about 3,600 aircraft.”
