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Analysts: United aircraft order could be sign worst is over

December 10, 2009

United disclosed details this week about deals the airline reached with Boeing and Airbus to split a 50-aircraft buy between each airplane manufacturer.

Airline executives said the purchase plan was more about striking great deals during a recession to replace aging existing airplanes, but analysts say the very fact that a carrier is willing to commit to such a major buy at this time provides another signal that the worst may be over for the industry.

Under the deals, United will place 25 orders apiece for Airbus A350-900s and Boeing 787-8s. United said it still needs to work out the financing for the aircraft, but the airline said both Boeing and Airbus have agreed to provide loans if the carrier needs them.

At current list prices, the new planes would cost more than $10 billion -- about $6 billion for the A350s and $4 billion for the 787s. United said it received a discount, although it won't disclose how much.

United has pushed off delivery of the planes until 2016 and the airline has negotiated rights to defer the orders.

The A350 seats 314 passengers and the 787 can accommodate up to 250. Analysts said the carrier would likely use the twin-aisled jets for long-haul international service.

United executives identified plans this week to beef up the carrier's trans-Pacific service.

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#1December 11, 2009
It may be a sign but with all of the contingencies United put on the orders, it seems fairly obviously United is not convinced that they are out of the woods, so to speak.

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