United Airlines finally goes shopping

photo by Telstar Logistics

United Airlines is eying a large new order for up to 150 airplanes, worth $10 billion, according to an article in the Wall Street Journal. United is apparently choosing between Boeing and Airbus, and according to the article, it's an all-or-nothing deal, meaning that purchases won't be split between the two manufactures; this way, United might be able to get a better deal. And the deal shows that United has been thinking ahead, by waiting to order until bad times for the industry. This way, the planes could be delivered starting as early as 2010, when the industry is expected to look up.

The order also comes at a time when the airplane manufacturers are desperate for orders. Boeing, for example, has signed up 60 new orders so far this year, but has also lost 60. United is probably hoping that they can turn the manufacturers' desperation into their gain, in the form of lowered prices and permission to revise the order at a later date. I'm not exactly sure how United's expecting to pay for the order, especially given big losses and a pretty bad credit rating at the airline, but the article suggests that United might be seeking financing from the aircraft manufacturer, among other places. At the time of posting, United had not yet returned calls from The Airline Blog seeking comment.

So what planes are going to be replaced, and with what? The airline's A319 and A320 fleets are, on average, ten years old, and they're probably not going to go anywhere anytime soon. The 737-300 and -500 fleets are much older (20 and 17 years, respectively) and are already on their way out. United's new order is probably seeking to replace the larger 757-200, 767-300, and 747-400 aircraft, and maybe some of the 777-200s too. The airline has an average fleet age of 13 years - younger than most of its rivals - but much of that is due to the relatively young age of the Airbuses. The 757s are getting pretty long in the tooth, and it wouldn't be too surprising if they were replaced with the A321 or the Boeing 737-900ER. Neither of them could completely replace the 757, though; they'd probably just be used to replace the oldest ones or to simply supplement them. The 777s aren't old, either, since the 777 itself is a pretty new aircraft model. But United, being the launch customer for the type, has some of the oldest 777s flying, and some of those are the non-extended range variety. The different versions of the 787 might be a successful replacement for both the 767 and some of the 777s; maybe the A350 would work here too. And the 747-8 (which so far only Lufthansa has signed up for) might replace some of the 747-400s.