United Airlines announced Monday that the order for the Boeing 737 Max has been expanded to include 25 aircraft, bringing the total to 180 for the coming years, and that the delivery time has been cut to position itself for the expected recovery in travel.
The expanded contract is the latest vote of confidence in the aircraft, which has only just started flying again after two crashes left a global ground for nearly two years. This is also good news for Boeing, which is working to get out of the Max Crisis and, more recently, engine problems aboard some of its 777 aircraft.
“With these new aircraft, we can become more competitive,” said Andrew Nocella, United’s chief commercial officer. “It’s the right plane at the right time.”
United plans to deploy the jet across North America and Hawaii, replacing smaller aircraft when demand returns, Nocella said. It’s also more economical than its predecessor, a major asset for the airline as it seeks to reduce its carbon footprint. And the plane will help United resume their strategy of strengthening connections at mid-country hub airports in Houston, Chicago and Denver, he said.
“This will allow us to get back on track when we get out of the pandemic,” Nocella said.
The industry is preparing for a travel rebound once coronavirus vaccinations are widespread and the pandemic is tamed. The beleaguered 737 Max has been updated and is ready to fly again after a total of 346 people were killed in crashes in Indonesia in October 2018 and Ethiopia in March 2019.
Updated
March 1, 2021, 12:38 p.m. ET
After the second accident, the Max, a star of the Boeing fleet, was scrutinized by lawmakers, regulators and the news media around the world. In November, the Federal Aviation Administration became the first global regulator to lift a ban on the jet. Boeing and the airlines using the Max had to install software updates, change wiring, and make other changes to the aircraft before they could fly again. Regulatory agencies in other countries followed, and the Max has already performed thousands of flights.
United, which has 30 Max aircraft in its fleet, only put the aircraft back into service a few weeks ago. The airline expects 24 this year, followed by 40 next year and 54 in 2023.
The Max has a list price of more than $ 120 million, but it often sells for a cheaper price, especially on large orders. Industry analysts say airlines have the leverage to bring that price down further as slowing travel has eased the pressure to build fleets. The manufacturer has shipped more than 400 Max jets to customers since the aircraft first flew paying passengers in 2017. Almost 4,000 orders were still pending.
Unlike its competitors, United has not removed any mass aircraft from its fleet throughout the pandemic. This is part of a strategy aimed at providing maximum flexibility in restoring the trip, Nocella said. With another round of federal payroll for the industry looking likely, United will also be able to keep much of its workforce through September. Two previous rounds of federal aid have largely helped airlines avoid vacation days and layoffs.
While Monday’s order shows United is gearing up for a rebound from the trip, a significant rebound is likely still a long way off. Mr Nocella said United hopes to reach a “tipping point” by the end of the year where the tourist recovery will accelerate rapidly. At the moment, United and its peers continue to lose money every day, even as they take care of what few travelers have left.
