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United Could Change More Aircraft Orders

Order could reduce obligations on Airbus A350-1000 and add more 737-Max 10X to fleet.

More aircraft order changes could be coming to United Airlines in the near future. In an interview with Bloomberg, United’s chief financial officer Andrew Levy suggested the Chicago-based carrier could reduce their orders of the new A350-1000, in favor of adding more Boeing aircraft to their fleet.

As it stands today, the airline holds the second most orders for the 1000 variant of the composite aircraft. According to data provided by Airbus, United has committed to 35 A350-1000 aircraft, two less than Qatar Airways. A share of those orders could be cut into by Boeing with their latest variant of the 737 family, the 737-Max 10X.

“These fleet decision are big decisions, they affect your balance sheet for a long time,” Levy told Bloomberg. “These are big capital decisions that you have to live with for a really long time, so you need to make sure you get it right.”

The talk of reducing the aircraft order comes after United postponed the delivery of their order of 737-800 aircraft by upgrading orders to the 737-MAX. The move potentially defers nearly $2 billion of expenses by the airline through 2018 as part of a promise by airline executives to reduce spending and increase revenue.

The airline could also reduce their stock buyback plan. During the interview, Bloomberg reported that airline executives were considering slowing their stock buybacks due to newly approved union contracts and the rising cost of fuel.

The reconsideration of the Airbus A350-1000 could potentially affect the airline’s rollout of their new business class product, United Polaris. In their press launch in Chicago, the carrier announced the new aircraft would come equipped with the premium product.

[Photo: Shutterstock]

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jacobac00 December 4, 2016

"A share of those orders could be cut into by Boeing with their latest variant of the 737 family, the 737-Max 10X." The A350-1000 would not convert to B737. Instead they are considering converting them to A350-900 or A330s. The 737-Max 10 would be in place of some current 737NG or 737-Max orders.