MIAMI — On Wednesday, United is set to hold its annual investor’s call to go over its 2016 performance. Rumors from internal sources have begun surfacing that some sort of fleet announcement could be made during the event.
If the rumors end up being true, what could a fleet announcement entail?
Many have been expecting United to place a top-off order for more Boeing 777-300ERs for quite sometime. It is believed that the airline may have already scored a really good deal for the aircraft as Boeing is transitioning into the next generation 777X. Also, with United now planning to retire all of its 747s by the end of 2017, and the ability to receive more triple sevens before the end of 2017, it seems even more likely that an announcement for more 777-300ERs might be destined for the Chicago-based carrier.
Meanwhile, we may also hear about the future of the 35 A350-1000s United has on order, and that has been under review for the last several months. Could United cancel this order but convert some of it for A321s? The urgency and impetus behind the A350-1000 order placed in June 2013 (after an original order for A350-900s in March 2010) has dissipated given the current price of fuel. While oil prices aren’t quite at at their trough anymore, they are still low enough that the unit costs of the A350-1000 are not radically lower than those of an attractively priced 777-300ER. So trading A350-1000 orders for more useful narrowbodies (see below) and cheap 777s might be a winning strategy in the current environment.
Another rumor that has surfaced is that United may order the Airbus A321; the airline is the only one of the big three that does not currently fly this A320 family variant.
United is planning to retire 15 of its Boeing 757-200s (the former legacy United Premium Service (PS) configured aircraft) by the end of 2018, as these would require an expensive modification in their fuel tanks. It seems quite likely that an order for some A321s could be announced Wednesday, or maybe even at a later date as a replacement for the 757s that would be retired.
The A321neo or LR would be an interesting fit in United’s network with the trans-Atlantic range given that United has three strong trans-Atlantic hubs (Newark, Washington D.C., and to a lesser extent Chicago O’Hare). There are probably 5-7 new destinations at each hub that would be feasible with the A321LR’s improved economics vis a vis the 757. It would also open up new opportunities from United’s Houston hub to Latin America. While the Houston market (and Latin America) is facing some economic woes, in the long run United has the weakest natural hubs and partnerships in Latin America, so anything that helps narrow that gap is a plus.
It is quite likely that United will need some type of replacement for them to continue operating all of its transatlantic flights as well as trans-con service between Newark, San Francisco, and Los Angeles without upgrading or canceling services.
Could an order for the 737 MAX 10X be made as well? United was listed as one of the potential customers that Boeing has targeted the larger 737 MAX variant for. United currently has 99 737 MAX 9 aircraft on order which are expected to start being delivered in 2018.
Stay tuned to Airways for the latest on any fleet announcements as well as a re-cap of United’s 2016 performance.