It is the largest new aircraft order in United Airlines‘ history and one of the largest single airline orders ever. United will add an additional 270 planes to its backlog, taking it over 500 single-aisle aircraft on order.
But the scale of the order extends far beyond just the number of planes involved. United’s move upends the US travel market and clearly puts the carrier in a position to (re)claim the premium traffic rebound expected as the market emerges from its COVID-induced slumber.
This is designed to capitalize on the unique competitive advantages we have at United Airlines. United Next is much more than an aircraft purchase.– United Airlines CEO Scott Kirby
The basics on United’s 270 plane order
The 270 aircraft are split across three types:
- 50 – 737 MAX 8, with deliveries starting this summer from a prior order; total of 90 now expected in the fleet
- 150 – 737 MAX 10, with deliveries starting in 2023 from a prior order; total of 250 now expected in the fleet
- 70 – A321neo, with deliveries starting in 2023; additional to the 50x A321XLRs ordered in 2019
The company also has 50 737 MAX 9 aircraft on order, pushing the total open single-aisle order book north of 500 aircraft. All of these orders are net new and do not reflect conversion of options or renegotiations of other planned deliveries (i.e. the A350s are still on the books, too).
United also plans to retire some 300 older and smaller aircraft in the coming years as the new deliveries begin. More than 200 of its 50-seat regional jets will leave the fleet while roughly 100 mainline planes (including the 752s, from 2023), are slated for retirement.
If the market shifts, or if United decides that the necessary interior retrofits are too costly on the rest of the existing fleet, some of those planes could also be retired. CFO Gerry Laderman notes that “Given the size of our fleet and when you look at the age of some of our aircraft, one of the great things about this order is the flexibility of using aircraft for replacement or for growth. In both cases the cost benefits we get are enormous.”
Today the plan is growth, and that will be the case even if these planes replace existing 1-to-1 given the gauge shift. But the fleet profile is likely to change more than was disclosed today.
Growing in a HUGE way
On its own the net 200 growth in fleet size is significant. But when considering the size of the planes the impact is even more pronounced.
The aircraft being retired represent approximately 25,000 seats disappearing from the company’s operations. The MAX 10 order book alone nearly doubles that number with replacements. Full details on the cabin layouts are not available, but United will increase its overall seat count by roughly 70-75,000 with this transition. This is the equivalent of adding the capacity of Allegiant, Frontier Airlines, and Spirit Airlines combined into the US market.
The premium play
Not only does the order represent a ton of seats, but many of them will be a premium option, either first class or United’s Economy Plus extra leg room product. United’s EVP/CCO Andrew Nocella described the impact of that shift:
About one third of our domestic departures are on 50-seat regional jets. Those aircrafts have no first class cabin and no economy plus seats, either. So as we retire 200 of those aircraft and let’s say they’re all one for one replaced by a MAX 8 or MAX 10 or an A321neo, those aircraft generally come with 16-20 first class seats, up from zero. And they come with 50-60 economy plus seats up from zero. So when you do all that math the average size of the United North American flight goes up by 30 feet or 30%, but the average size of the number of premium seats we’re flying per departure actually goes up by 75%. It is a staggering change.
United also finally commits to offering a first class cabin its NYC-area hub operations, matching moves from Delta Air Lines and American Airlines. By November 2021 the Newark hub should see the CRJ550s added to the operation, giving the company first class and E+ seats on even the smallest planes serving Newark. A couple straggler CRJ200s remain on the schedule at LaGuardia, but those should eventually disappear as the 50-seat fleet draws down in the coming years.
IFE for everyone
United is not just adding a ton of seats to its fleet. And it is not just adding a ton of premium cabin/legroom seats. It is also angling to make the on-board experience more compelling for travelers. This includes a commitment to in-seat entertainment for every passenger on the mainline fleet. The new planes come with the kit standard and the existing fleet will be retrofit to add the system – plus power outlets – at every seat. It is a multi-year process to get there, but the company plans for two thirds of the single-aisle fleet to be fitted by the end of 2023 and 99% two years after that.
Lots more to come on the IFE upgrades, including details on the Bluetooth pairing, later today after the company offers demonstrations of the kit in action.
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