(Chicago, December 8, 2009) -- United Airlines today announced a significant investment in the company's future with a widebody aircraft order that will enable the carrier to reduce operating costs and better match aircraft to key markets it serves, while providing its customers with state-of-the-art cabin comfort. The new technology aircraft will reduce fuel burn and environmental impact, while enabling service to a broader array of international destinations. United ordered 25 Airbus A350 XWB aircraft and 25 Boeing 787 Dreamliner aircraft and has future purchase rights for 50 of each aircraft.
The aircraft order follows a rigorous, six-month request for proposal process, which resulted in agreements with both manufacturers, enabling the company to meet its financial and operational objectives and respond to changes in future market conditions. The breadth in size and capabilities of the different aircraft models ensure the company has the right aircraft for the right market throughout the fleet replacement cycle.
Order an investment in the future
"Over the last few years we have made fundamental improvements in United's performance, delivering excellent cost control while improving the quality and reliability of our product. This aircraft order is another significant step on the path to position United for long-term success in a highly competitive global market," said Glenn Tilton, UAL Corporation chairman, president and CEO. "I would like to thank our team for making this order a reality in a manner that is consistent with our disciplined financial strategy. We are investing in our future, and we are well positioned to take full advantage as the economy recovers in the shorter term."
United expects to take delivery of the aircraft between 2016 and 2019; at the same time it will retire its international Boeing 747s and 767s. These 50 new aircraft will reduce the average seat count by about 19 percent compared to the aircraft they will replace, and by about 10 percent when averaged over the entire international fleet. With the Airbus A350 powered by the Rolls Royce Trent XWB engine, and the Boeing 787 powered by either the Rolls Royce Trent 1000 or the GE GEnx, United estimates it will reduce its fuel costs and carbon emissions from the 50 aircraft by about 33 percent. Additionally, the company expects average lifetime maintenance costs for the new aircraft to be approximately 40 percent lower per available seat mile than the aircraft that will be retired.
The new aircraft will open up new revenue opportunities for United as the smaller size, longer range, and lower operating costs of these aircraft allow the company to profitably serve a broader range of international destinations. The A350 has a range 11 percent greater than the current B747, and the B787 has a range 32 percent greater than the current B767.
Both new aircraft offer significant improvements to the customer experience, including larger windows, more overhead bin space and improved lighting, among other features.
United leverages current environment, orders from both manufacturers
This order provides United with the most efficient aircraft for its international network, providing the right range, size and operating costs for United's diverse set of worldwide destinations, said CFO Kathryn Mikells.
"Our decision to move forward aggressively at the bottom of the business cycle clearly benefited us. We secured the right aircraft and the right deal for United," Mikells said. "The orders require minimal capital over the next few years but ensure we will have the right planes to strengthen our global network over the next decade."
Ordering in a down cycle expected to reap benefits
"We are pleased to be working with United, our longtime customer, and launch customer of the Boeing 777," said Jim McNerney, Boeing chairman, president and CEO. "We think United is making a smart decision placing an order at this point in the cycle and taking delivery years into the future. The 787 Dreamliner will provide United with additional range and unmatched fuel efficiency."
"United Airlines is a global icon, and it's very gratifying that they have chosen the A350 to be a key part of their strategy," said Airbus President and CEO Tom Enders. "It also is fitting that the selection of the eco-efficient A350-900 comes at a time when the world is focusing on operating as efficiently as possible and minimizing environmental impact. Airbus and United have been partners for two decades, and we look forward to extending that partnership well into the future."
Related Research on ASDReports.com: