(June 10): United Airlines Holdings Inc. is in advanced talks for a large narrow-body aircraft order that would include at least 100 Boeing Co. 737 Max jets as part of a broader fleet revamp, according to people close to the matter.
The Chicago-based airline sees an opportunity to upgrade its fleet and is studying several new, fuel-efficient models at a time when the likes of Boeing and Airbus SE are hungry for deals and demand for leisure travel is surging in the U.S., said the people, who asked not to be identified as the discussions are confidential.
Boeing’s portion of the order could include 150 Max, two of the people said.
The negotiations come as Boeing works to boost sales of its best-selling jet following two fatal crashes that led to a lengthy global grounding, and then a collapse in air travel because of the pandemic. To attract orders, the U.S. aviation titan has been offering some customers steep discounts, reduced upfront payments and other inducements that may not be available once global air traffic returns to more normal levels, one of the people said.
“We do not currently have a deal in place with Boeing or Airbus to purchase new aircraft and do not comment on speculative aircraft orders,” United spokeswoman Leslie Scott said. The carrier has turned its attention “away from managing the crisis of the pandemic and toward planning for our bright future,” she said.
A Boeing spokesman said the company doesn’t comment on customer discussions.
A deal would expand on an order for 25 Max single-aisle jets that United announced in March. It could also help United retire its oldest single-aisle Boeing 757s, many of which date from the mid-1990s and burn more fuel than the newer generation jets.
United has 72 of the 757s, including 21 757-300s, a slightly longer version acquired by Continental Airlines from 2001 through 2004, according to Cirium data. United has 33 757s in storage, mostly the 757-200 variant.
The carrier flies the 757s to its domestic hubs and Hawaii, along with some trans-Atlantic routes from the East Coast. United plans to migrate those routes to the long-range Airbus model, ordering 50 A321XLR in December 2019 with deliveries to begin in 2024.
Other large customers like Southwest Airlines Co., Ryanair Holdings Plc and Alaska Airlines Inc. have been stocking up on Max jets at a time when Boeing is trying to restore confidence in its biggest seller. The manufacturer is looking to clear hundreds of undelivered 737s and 787s from its inventory, while filling delivery slots as it starts to speed up work in its factories.
Southwest said Tuesday it struck a deal to take 34 more of Boeing’s smallest 737 next year, in addition to the 100 Max it ordered in March. The all-737 operator now expects to spend about $1.5 billion on aircraft next year, about $800 million more than previously planned, the carrier said in a filing.