United orders another 25 Boeing 737 MAX jets to prepare for recovery
United Airlines Holdings Inc has ordered 25 new Boeing 737 MAX aircraft to receive in 2023 and moved up the delivery of others as it prepares to replace aging jets and meet post-pandemic demand growth, the company said on Monday.
U.S. airlines have parked and retired aircraft as the coronavirus pandemic sapped travel but are beginning to position their business for a recovery as more vaccines are distributed across the country and globally.
“With a number of our aircraft nearing the end of their lifecycle and the growth opportunities that we know will exist in the COVID-19 recovery period, this agreement will help us to grow as demand returns,” Chief Commercial Officer Andrew Nocella said in a memo.
The move is a vote of confidence in Boeing after two fatal 737 MAX crashes triggered a 20-month safety ban that U.S. regulators lifted last November.
Shares in Boeing and United rose over 6%.
In addition to the new Boeing order, United said it has moved up delivery of 40 previously ordered MAX aircraft to 2022 and 5 to 2023, meaning it will have 94 new aircraft in its fleet over those two years.
Altogether, it has 188 orders for the more fuel-efficient, single-aisle MAX.
The deal comes as United continues to push for a third round of government payroll relief for airlines. It sent about 9,200 furlough notices to employees last week that will take place in April without an extension of a current support package, a spokeswoman said.
After voluntary leaves and early retirements over the past year, United said its headcount totaled 74,400 at the end of 2020, down 22% from 2019.
Its total aircraft financial commitments totaled about $24.3 billion as of February, 2021, it said in a regulatory filing.
United has 52 Boeing 777-200 wide-body aircraft which were grounded last week after an engine failure, prompting some potential scheduling headaches.