United nearing decision on refleeting

Update, November 12:

We’ve learned United is splitting the wide-body and narrow-body RFPs into two, now planning to make two purchases instead of one. The wide-body order will come first. Boeing has recently become aggressive with 787 offers and now this is a real competition between the 787 and A350. The narrow-body RFP will almost certainly slip to 2010.

Original Post:

United Airlines is nearing a decision on refleeting, replacing Boeing 747s, 777s 767s and 757s. Flight International has this detail. Flightglobal’s ACAS database shows United operates 25 747-400s, 34 767-300ERs, 19 777-200s, 33 777-200ERs and 94 757s.

This would be a huge order for Airbus or Boeing. United previously said it plans to stick with one supplier.

The original RFP drew hoots from the industry. United sought terms that were considered ridiculous by many, particularly given United’s own financial condition and the existing backlogs at Airbus and Boeing. Industry sources said UA wanted the winning manufacturer to buy the 767s and 757s at above market valuations and lease them back at below market rental rates; to finance 100% of the new airplanes; and require no down payment or progress payments.

United said it is not interested in the Airbus A380 or the Boeing 747-8; one industry source said United might consider the 747 if Boeing would finance 105% of the purchase price, a prospect considered unlikely even though Boeing needs a new passenger-version customer. We are told UA believes the 787 in unable to perform the missions desired (perhaps a reflection of the overweight and fuel burn issues) and that the 777-300ER is considered by UA to be “old technology.” (This would be the second airline to take this view that we know of, if the characterization is correct.)

We’re told Airbus seems to have the advantage to win the order. We’re told of the prospect of 35 A350s could be initially ordered. The A320 family, which comprises the bulk of UA’s mainline fleet now that the Boeing 737 Classics have been retired, has the advantage over Boeing’s 737NG, we’re told.

The Airbus plan to add winglets to the A320 family, beginning with the A321 to better compare with the 757, may be significant. UA does not operate the A321 today. The A321 does not have quite the range of the 757 and winglets would make the airplane a better US trans-con airliner. We speculate that this might be a key to winning the UA order.

Airbus is also to decide by the end of next year whether to re-engine the A320 family, and officials are talking with CFM International, Pratt & Whitney, Rolls-Royce and International Aero Engines about doing so. Entry into service would be about four years after a decision, or late 2014 or in 2015. Airbus said it doesn’t plan a replacement airplane until 2024. Boeing will likely be forced into a similar decision along the same timeline whether to re-engine the 737.

Interestingly, it was United’s order for the A319/A320 that spurred Boeing to develop the 737NG. Boeing stubbornly offered the 737-400 to United, up to then an exclusive Boeing operator (McDonnell Douglas DC-10s being the exception). Boeing did not believe UA would order the A320 and refused to offer an update of the venerable 737. When UA ch0se Airbus, Boeing developed the 737NG.

It is unlikely re-engining will play a role in UA’s decision because Airbus won’t decide until YE2010. But we always like ironies and throw in this tidbit “just because.”

8 Comments on “United nearing decision on refleeting

  1. It points towards Airbus if they can offer a suitable financial deal.
    The 350XWB looks pretty safe considering the comments on the T7.
    One big point for the A320 family is a definite winglet programme, and because there exists an engine choice, no immediate selection is necessary so UA could possibly be a launch customer for a new engine should Airbus decide to go that way.
    That leaves Boeing to pick up the Ryanair business if they want it.

  2. Several things here seem strange:
    “United said it is not interested in the Airbus A380 or the Boeing 747-8; one industry source said United might consider the 747 if Boeing would finance 105% of the purchase price”
    – So their primary driver for choosing the aircraft is not whether it will fit into their network/strategy?

    “777-300ER is considered by UA to be “old technology.””
    – I am surprised by this characterisation from UA.

    “The Airbus plan to add winglets to the A320 family, beginning with the A321”
    – That is incorrect. They will not begin with the A321. The first model will be A320. All 4 models will be retrofitted, eventually.

    • Unless something has changed in the last 32 days, Airbus told us directly when we were in Toulouse the A321 will get the winglets first.

  3. Neither Company is in a position to do very creative financing and should not try.

  4. There must be alot of haggling and negotiating going on and several statements such as the 777-300ER is old technology is part of the game.

    Also sounds like the 747 fits the bill but only if it is financed.

    Hard to tell who will really stretch for this order because there are many open delivery date issues besides the willingness to reengine or replace

    I also wonder how profitable this order is in any event

  5. So is the number 150? Or are they ordering more? Less?

    I’ve said on other forums that if United was inclined they could go to a very simple A32X/A350 fleet, but that would require over 200 aircraft being ordered. So I expect at least one current type to soldier on for a while, my bet is some of the 757s. They have around 110 widebodies (the focus of the order), so maybe they will replace 40-50 757s with A321s.

    Every other major in the US (even US) plans on holding onto the 757 for the long haul, so I’d expect UA to be no exception (but UA has done strange stuff in the past, so who knows…)

  6. Not sure the airbuses can replace existing UAL a/c on the long haul routes like ORD-HKG or LAX-SNY. Cant see a 350 on those. The A320 filled a nice niche in an otherwise Boeing fleet. Not sure the 321 is a very high tech replacement for the 757 either. I tend to think 787 and 747-8 combos would fill the bill nicely

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