United Airlines said on Monday it was adding 25 planes to its order for the Boeing 737 Max, bringing its total to 180 in the coming years, and that it had accelerated the delivery time as it sought to position itself for the expected recovery in travel.
The expanded control is the latest proof of confidence in the plane, which has just resumed flying after two crashes that resulted in a worldwide grounding for nearly two years. This is also good news for Boeing, which is working to weather the Max crisis and, more recently, engine problems on some of its 777 planes.
“These new planes will allow us to be more competitive,” said Andrew Nocella, United’s commercial director. “It’s the right plane at the right time.”
United plans to use the jet across North America, including Hawaii, replacing smaller planes as demand returns, Nocella said. It is also more fuel efficient than its predecessors, a significant advantage for the airline looking to reduce its carbon footprint. And the plane will help United restart its strategy of strengthening connections at major airports in the center of the country, in Houston, Chicago and Denver, he said.
“This will allow us to get back on this path as we come out of the pandemic,” Nocella said.
The industry is bracing for a rebound in travel once coronavirus vaccinations become widespread and the pandemic is tamed. The besieged 737 Max has been updated and ready to fly again after crashes in Indonesia in October 2018 and Ethiopia in March 2019 that killed a total of 346 people.
After the second crash, the Max, a star in Boeing’s fleet, came under intense scrutiny from lawmakers, regulators and the media around the world. In November, the Federal Aviation Administration became the first global regulator to lift the ban on jets. Boeing and the airlines that use the Max had to install software updates, change wiring, and make other modifications to the planes before they could fly again. Regulators in other countries have followed suit, and the Max has already been used to perform thousands of flights.
United, which has 30 Max planes in its fleet, resumed using the plane just a few weeks ago. The airline expects to receive 24 this year, followed by 40 next year and 54 in 2023.
The Max has a list price of over $ 120 million, but often sells for less, especially in large orders. Industry analysts say airlines have leverage to lower that price further, as slower travel has eased pressure to build fleets. The automaker has delivered more than 400 Max jets to its customers since the aircraft began carrying revenue passengers in 2017, with nearly 4,000 orders pending.
Unlike its competitors, United did not mass withdraw planes from its fleet throughout the pandemic, as part of a strategy to ensure it had maximum flexibility when the resumption of travel, Nocella said. With another round of federal payroll aid for the industry looking likely, United will also be able to keep a large chunk of their workforce until September. Two previous rounds of federal aid have gone a long way to helping airlines avoid major holidays and layoffs.
As Monday’s order shows United preparing to rebound, a meaningful recovery is likely still far away. Mr Nocella said United hoped to reach an ‘inflection point’ by the end of the year, after which the travel resumption would pick up quickly. For now, United and their peers continue to lose money day by day even as they adjust to what few travelers remain.