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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

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United Airlines to announce order for 110 Airbus and Boeing jets

A logo of Airbus is seen at the entrance of its factory in Blagnac near Toulouse, France, July 2, 20... A logo of Airbus is seen at the entrance of its factory in Blagnac near Toulouse, France, July 2, 2020. REUTERS/Benoit Tessier
A logo of Airbus is seen at the entrance of its factory in Blagnac near Toulouse, France, July 2, 20... A logo of Airbus is seen at the entrance of its factory in Blagnac near Toulouse, France, July 2, 2020. REUTERS/Benoit Tessier

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According to two individuals with knowledge of the situation who spoke to Reuters, United Airlines (UAL.O) was planning to announce an order for 50 widebody 787 Dreamliners from Boeing (BA.N) and 60 A321 narrowbody planes from Airbus (AIR.PA) on Tuesday.

In the first hour of trade, shares of Boeing increased by 2.2%, while shares of Airbus increased by 0.4%. Boeing, United, and Airbus all declined to comment. In order to accommodate the need for international travel, long-distance widebody aircraft demand has increased. 18 Dreamliners were acquired by Air Canada last month, while Air France-KLM ordered 50 Airbus A350s. Demand for narrowbody planes has also increased since the epidemic, particularly for bigger models like the A321, which has dominated the single-aisle market.

Richard Aboulafia, managing director of AeroDynamic Advisories, remarked, “You can call it the great convergence towards the middle.” Concerns regarding travel demand have been reflected in the prices of airline shares as a result of United’s domestic market’s declining pricing power. Last month, the NYSE Arca Airline index (.XAL) decreased by 12%.

Despite an uncertain economic future, travel expenditure has remained strong. However, economists are unsure if consumers would continue to spend lavishly on vacation if the country enters a recession. It was United’s second significant aircraft acquisition in the previous year. Due to the growing Boeing and Airbus backlogs and the postponement of jet delivery till the end of the decade, carriers have started taking orders quickly.

United Airlines announced a massive purchase of 100 Boeing 787 Dreamliners and 100 737 MAXs in December to meet demand when pandemic restrictions loosened and replace older, less efficient aircraft.

The order raised questions at the time regarding United Airlines’ balance situation. By 2032, the business has stated it anticipates receiving roughly 700 aircraft. According to stockbroker Jefferies, the price might total $50 billion.

According to some observers, airlines have placed significant orders for jets due to a broken supply chain brought on by fresh aircraft shortages. Many of the older aircraft need to be replaced. According to Aboulafia, airlines are currently locking in attractive rates.


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