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NORTH CHARLESTON, S.C./CHICAGO (Reuters) – United Airlines said Tuesday it is ordering 100 Boeing (NYSE:BA) 787 Dreamliners and 100 737 MAX airplanes, a major order as the air carrier pushes for post-pandemic growth and replaces older less-efficient aircraft.
The Chicago-based airline’s order for 200 airplanes has list prices of about $43 billion and is a big boost to the U.S. planemaker that has faced political and production issues for the two planes this year.
United said Tuesday it is also exercising options to purchase 44 Boeing 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 MAXs on order.
United’s big bet on 787 airplanes reflects expectations for continued rising demand for long-haul international travel and its desire to replace older airplanes. Boeing said it is the planemaker’s largest-ever Dreamliner order and United said it is the largest-ever widebody order by a U.S. carrier.
United also said it would delay its previously announced order of 45 Airbus A350 airplanes until 2030 “at the earliest.” United Chief Executive Scott Kirby (NYSE:KEX) said one key factor in the decision between Boeing and Airbus for its major widebody order was its current 787 fleet.
“When we’re trying to bring on 2,500 pilots a year and grow the airline, introducing a new fleet type slows that 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.
United said it expects to take 787s deliveries between 2024 and 2032 and can choose among 787-8, 9 or 10 models. United will buy 787s to replace its entire 767 fleet by 2030 and some 777s, cutting carbon emissions per seat by about 25% for the new planes.
United Chief Commercial Officer Andrew Nocella said the order will allow it replace older planes with new more fuel-efficient models with more premium seats that carry more cargo and fly faster: “We make more money,” Nocella said of the new planes.
United said its capital expenditure budget for 2023 is $9 billion and $11 billion for 2024 with the bulk of that spent on new aircraft.
United plans to tout the order at an event on Tuesday at Boeing’s South Carolina factory with Boeing Commercial Airplanes CEO Stan Deal, who said in a statement the orders “will help United accelerate its fleet modernization and global growth strategy.”
Both the MAX and 787 have faced issues this year.
In August, Boeing finally resumed 787 deliveries after production problems forced it to suspend deliveries in May 2021. The Federal Aviation Administration in July approved Boeing’s inspection and retrofit plan needed to meet certification standards and is inspecting each aircraft before delivery.
Last week, Boeing suffered a setback when Congress declined to extend a looming deadline that would impose 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 the MAX 10.
Boeing has been lobbying for months to convince lawmakers to waive the deadline that affects its MAX 7 and MAX 10 airplanes and was imposed by Congress in 2020 after two fatal 737 MAX crashes killed 346 people in Indonesia and Ethiopia.
On the extension, 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 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 of 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 Tuesday it was making no changes to the A321neo order.
