By Justin Bachman
United Airlines Holdings Inc. is overhauling its fleet with the biggest jetliner order in company history and an ambitious upgrade for its aircraft cabins, bolstering a push to appeal to more travelers willing to pay for pampering.
The airline agreed to buy 200 Boeing Co. 737 Max jets and 70 Airbus SE A321neo planes, a deal valued at about $15 billion based on estimates by aircraft appraiser Ascend by Cirium. Those planes and other United single-aisle jets will get a revamped cabin with seat-back screens and larger overhead bins, according to a company statement Tuesday.
The plans signal the airline’s intention to step up competition with Delta Air Lines Inc. and American Airlines Group Inc. for premium-seat customers, who demand more creature comforts and typically generate an outsize portion of industry profits. United will use the new planes to reduce its use of smaller regional jets amid an anticipated rebound in corporate demand, which is still stuck at less than half the pre-pandemic level.
“We’re deadly serious at United Airlines about getting people to fly United,” Chief Executive Officer Scott Kirby said in a webcast presentation. “The bet we’re making today is not about business travel returning – business travel is going to return. The bet we’re making today is that customers care about the product.”
Kirby declined to specify the purchasing discounts that United, one of the world’s largest airlines, obtained from the jet manufacturers.
The order includes 50 of Boeing’s best-selling plane, the Max 8, along with 150 of the larger Max 10 jets. The purchase boosts United’s Max order book to 380, including 30 aircraft that have been delivered, according to the U.S. planemaker. Boeing’s workhorse jet is in the midst of a comeback from a 20-month grounding that was prompted by two deadly crashes.
United previously ordered 50 Airbus longer-range A321XLR aircraft for flights from the U.S. to Europe. A significant portion of the newly ordered jets will be built at the Airbus facility in Mobile, the European planemaker said.
Combined with United’s existing orders from Airbus and Boeing, the purchases will enable the airline to introduce more than 500 new single-aisle jets over the next five years, Kirby said. That includes 40 next year, 138 in 2023 and as many as 350 aircraft in 2024 and beyond.
By 2026, the larger-plane strategy will boost United’s seats for each departure by 30% compared with 2019 levels. The gain will be about 75% for premium berths per North American departure. The increased seat count in United’s new fleet will lead to an 8% drop in costs for each seat flown a mile, Kirby said.
The roomy Max 10 and A321neo planes are designed to help United grow at its hubs in Newark, New Jersey, and San Francisco, said Chief Commercial Officer Andrew Nocella. Those airports, located in highly lucrative corporate-travel markets, are constrained in adding more flights due to limits on aircraft movements in a given time period – another reason to use bigger planes.
“We’re going to compete against all product types out there,” Nocella said.
United plans to cull more than 200 of its 50-seat regional jets, restricting those planes to flights serving the smallest communities, mostly from its Denver hub, Nocella said. The company also plans to retire its Boeing 757-200 fleet while keeping its 21 larger 757-300 aircraft.
“Boeing’s need for a 757 replacement was highlighted, as United appeared to prefer the Airbus A321 for that mission,” Bloomberg Intelligence analyst George Ferguson said in a report.
All told, the Chicago-based airline will retire about 300 planes.
The move toward larger domestic aircraft and a refreshed cabin mimics a strategy set several years ago by Delta, which minimized its reliance on regional jets and shifted many routes to bigger planes with more premium seats.
United’s decision to put screens at each seat also echoes Delta’s approach, while American contends that most passengers prefer to stream entertainment on their own devices.
The new interior will be applied to two-thirds of older aircraft by 2023 and virtually all by mid-2025, United said. The company said it would include a power outlet at each seat and larger bins for every customer to have a roller bag, helping them to avoid gate-checking of luggage. The carrier will upgrade the Wi-Fi access to broadband speeds on its fleet.
(With assistance from Julie Johnsson and Mary Schlangenstein.)
This story originally appeared on the Alabama NewsCenter website.