United Airlines has placed an order for 270 jets, the biggest in the airline’s history, in a bet on a resurgence of premium travel after the pandemic.
The Chicago-based company said on Tuesday it was ordering 200 Boeing 737 Maxes and 70 Airbus A321neos and expected to create 25,000 jobs by 2026 linked to the order.
At the same time, United is reconfiguring its existing fleet with more first-class and premium economy seats and improved in-seat entertainment and overhead storage.
Combined with its current orders, United will add more than 500 new narrow-body jets to its fleet between 2022 and 2024, as it retires about 300 planes, the bulk of them regional jets.
The number of United’s seats on US domestic flights will increase 30 per cent over the next five years, while the number of premium seats will rise 75 per cent compared with 2019 levels.
United’s shares fell 2.6 per cent on concern about how the huge order would affect the company’s financial position. The list price of the planes is more than $30bn, but typically airlines pay half the list price.
“It will be up to the company to articulate . . . how new orders change the investment trajectory while also providing room for debt reduction,” said Evercore ISI analyst Duane Pfennigwerth. “What is the path back to meaningful free cash flow, which will enable balance sheet repair for United?”
Chief executive Scott Kirby said the fleet changes “will revolutionise the experience of flying United as we accelerate our business to meet a resurgence in air travel”.
The airline has about $33bn in long-term debt. Like competitors, United raised cash from investors and the US government to survive the Covid-19 crisis, when travel curbs and fear of the virus caused passenger numbers to plummet.