The worst kept secret in recent memory is now official. Today, United announced it is ordering 100 Boeing 787s, adding options for 100 more, converting 44 Boeing 737 MAX options into orders, and adding another 56 MAX orders on to the pile.
Even though this sounds like a completely insane number of airplanes, it’s really not. United is a big international airline that went through a lengthy spell of completely ignoring its fleet while former CEO Glenn Tilton tried to reverse engineer the airline into giving him a giant payday. Because of that, United has fallen severely behind, and its fleet is getting old.
This isn’t a perfect chart, but it’s pretty close. By the end of this year, United should have right around 220 widebodies and other than some distant A350s technically still on order, there is nothing left to be delivered.
United Widebody Aircraft by Aircraft Delivery Date
Data via Cirium
Remember that part about United neglecting its fleet? You can see exactly where that happened, but it’s actually understated. Keep in mind that many of those orders around the turn of the millennium — including all the 767-400s — were from Continental, not pre-merger United.
If you count it up, right around 120 of United’s widebodies are at least 20 years old. Those all absolutely need to have a replacement plan set, and that is what United is doing with this order. The 767s will all be gone by 2030, though these airplanes will start phasing out earlier as newer airplanes come in. (Those are the oldest widebodies in the fleet by far.)
The 777-200s will start phasing out later this decade, starting with the oldest airplanes in the fleet which are primarily those old Pratt & Whitney-powered “A” models with limited range.
The second 100 airplanes that United has on option… those are for growth opportunities, if they materialize. But since they’re just options, this will provide some flexibility and presumably help solidify delivery positions if the need arises. Plus, 200 sounds a lot bigger than 100, so Boeing probably knocked a little bit more off the price to show that people actually do still want to buy its airplanes.
And flexibility… there is some here. I mean, sure you’re buying 100 airplanes so you lose some flex in your options, but United does not have to make any decisions on the variant for the 787 orders yet. It can adjust those depending upon what it needs further down the line. I’d put my money more on 787-9s and -10s, but you never know what’ll happen by the time the decision has to be made.
I can’t imagine many, if any, of us are surprised that the Boeing 787 won the day over the A350 here. As United laid out on a call yesterday, there were just too many things going for the 787. First, it’s smaller than an A350 and to replace the 767s, United needs something on the smaller end. Sure, there are the A330neos in the market, but that adds more complexity. United was clear to explain on the call that already having a large base of 787s, needing to onboard a ton of pilots, and introducing a new fleet type does not sound like a recipe for efficiency.
Does this mean the 45-aircraft A350 order that has been on the books forever is dead? Nope. United said when the time comes to figure out a replacement plan for the 777-300ERs toward the end of the decade — which seems early — that’s when the A350 may make more sense.
I don’t think I really buy that line, but Airbus probably likes having the A350 on the order book, so no reason to cancel. Just keep pushing it out further and further. One thing does seem pretty clear… there’s no way those airplanes will be delivered in 2027 as currently scheduled.
With this order firmed up, United now has its fleet replacement plan in place through the end of the decade and beyond. That doesn’t mean there can’t be more orders to come, however.
Take the 737 MAX order. I asked what had changed between the last massive MAX order and now to make the airline decide it needed another 100 of them (mixing exercising options and new purchases). The response was that this was just really pushing planning further out. These MAXs are for the 2027/28 timeline, so as they extend the horizon beyond the original United Next plan, they find they want more planes.
With hundreds of these on order already, I don’t see why it makes sense to add more to the mix now… unless… wait, did Boeing roll out the ole’ “buy two 787s, get one 1 MAX free” holiday sweet dreams fiesta? Can’t turn that bargain down.
At first glance, this whole order is a big scary number. It requires a lot of cash and/or debt to buy these airplanes. But once you start going deeper and looking at the reality of the situation, this had to happen — at least, the widebody part of it. Previous generations of neglectful management put the airline in a place where it had to play catch-up.
In a sense, you could compare this to a decade ago when then-American CEO Gerard Arpey tried to make up for years of scrimping and saving by American’s leadership by placing a big order. Ok, granted, that was a split narrowbody order, and he was about to lose his job anyway, but you get the point.
With United’s orderbook now flush and a continuous evaluation of the airline’s longer term needs in place, it should help United to actually better plan for the future instead of just buying another roll of speed tape and hoping the 767s will keep flying for another decade.
