NORTH CHARLESTON, SC/CHICAGO, Dec 13 (Reuters) – United Airlines ( UAL.O ) said on Tuesday it is ordering 100 Boeing ( BA.N ) 787 Dreamliners and 100 737 MAXs as it pushes for post-pandemic growth and replaces older , less -efficient aircraft.
The Chicago-based airline̵[ads1]7;s order for 200 planes is worth about $43 billion at list prices and represents a major boost for the U.S. planemaker after political and production problems for the two planes this year.
United said the new order for 100 737 MAX aircraft includes the exercise of options to purchase 44 737 MAX aircraft for delivery between 2024 and 2026 and had ordered 56 more MAX aircraft for delivery between 2027 and 2028 and now 443 MAX aircraft on order.
United’s major investment in the 787 reflects expectations of continued growing demand for long-haul travel and a desire to replace older aircraft. Boeing said it was the largest Dreamliner order, while United said it represented the largest widebody order by a US carrier.
Boeing shares rose 2.7% and United shares were flat in premarket trading. United will average more than two deliveries of new planes a week next year and more than three a week in 2024.
United also said it would again delay its previously announced order for 45 Airbus ( AIR.PA ) A350s until 2030 “at the earliest.”
Industry sources have said that this order, an expanded version of one dating back as far as 2009, is actually in limbo after several delays and may not materialize.
United CEO Scott Kirby told reporters that “the right time for the 350 versus (787) conversation is when we replace the bulk of the 777s, which doesn’t really start at the end of the decade.”
Airbus was not immediately available for comment.
Kirby said a key factor in the decision between Boeing and Airbus for its large widebody order was its current 787 fleet.
“As we try to bring in 2,500 pilots a year and grow the airline, the introduction of a new fleet type will slow this down dramatically,” Kirby said.
United hired 15,000 new employees in 2022, including 2,400 pilots, and is on track to hire 15,000 in 2023, including another 2,500 pilots.
It expects to take 787 deliveries between 2024 and 2032 and can choose between 787-8, 9 or 10 models. United will buy 787s to replace its entire 767 fleet by 2030 and some 777s, reducing carbon emissions per seat by about 25% for the new planes.
United Chief Commercial Officer Andrew Nocella said the order will allow it to replace older planes with new more fuel-efficient ones with more premium seats that carry more cargo and fly faster. “We make more money,” Nocella said of the plan.
United said its capital budget for 2023 is $9 billion and $11 billion for 2024, with the bulk of new aircraft.
The airline plans to present the order at an event on Tuesday at Boeing’s South Carolina factory with Boeing Commercial Airplanes CEO Stan Deal.
Both the MAX and the 787 have faced problems this year.
In August, Boeing finally resumed 787 deliveries after production problems forced it to halt deliveries in May 2021. The Federal Aviation Administration in July approved Boeing’s inspection and retrofit plan needed to meet certification standards and inspects each plane before delivery.
Last week, Boeing suffered a setback when Congress refused to extend a looming deadline that would introduce new safety standards for the MAX 7 and MAX 10 variants. United said 80 of the new 100 MAX planes it is ordering will be MAX 10s.
Boeing has been lobbying for months to convince lawmakers to waive the deadline affecting its MAX 7 and MAX 10 planes and imposed by Congress in 2020 after two fatal 737 MAX crashes killed 346 people in Indonesia and Ethiopia.
On the expansion, Kirby said he was “pretty sure it’s going to get done in the next Congress” because “it was the right safety outcome,” but reiterated that United could switch to other MAX variants or buy more Airbus planes if lawmakers did not agree.
In June 2021, United announced its largest-ever order for 270 Boeing and Airbus jets, including 200 Boeing 737 MAX and 70 Airbus A321neo jets as part of its “United Next” growth plan.
United said it made no changes to the A321neo order.
Reporting by David Shepardson in North Charleston, SC and Rajesh Kumar Singh in Chicago; additional reporting by Tim Hepher in Paris; Editing by Raju Gopalakrishnan and Alexander Smith
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