By Tim Hepher, Tracy Rucinski and Eric M. Johnson
June 28 (Reuters) - United Airlines was putting the
finishing touches on Monday to an airplane order potentially
worth $30 billion at list values for up to 270 narrowbody jets
in a bid to secure a pandemic recovery at favourable prices,
industry sources said.
The order could include up to 200 Boeing 737 MAX and
some 70 Airbus A321neo which competes with the top end
of the MAX family for single-aisle trips needing most range.
Such a deal would notionally be worth $33 billion at the
most recently published list prices, but analysts say airlines
typically pay less than half price for deals of this size.
None of the parties commented ahead of an announcement
expected at a United investor event on Tuesday. Negotiations are
complex and numbers of units can shift, the sources cautioned.
The deal would be the industry's biggest since the
coronavirus pandemic pummelled air traffic and airline balance
sheets, eclipsing recent orders for more than 100 MAX from
Southwest Airlines.[
It would accelerate a recovery for the MAX which has been
logging orders to rebuild momentum damaged by a safety crisis
even before COVID-19. A 2019 draft order for 200 MAX from
British Airways owner IAG was never finalised.
However, it would not resolve a strategic stalemate which
has seen Airbus dominate the busy market for larger single-aisle
jets while Boeing relies heavily on demand for its core MAX 8.
A split order would highlight widespread concerns that the
MAX "can't solve the whole problem", one industry source said.
Airlines also have to consider availability when buying.
Such an announcement "could mean only two versus three
cheers for Boeing" since the A321neo remains "Boeing's nemesis
at the top end of the narrowbody market with a dominant market
share," Vertical Research Partners analyst Rob Stallard wrote.
United is considered one of the industry's most influential
buyers, whose whopping purchases can set the tone for decades.
A shock Airbus win there in 1992 led to the launch of the
most-sold generation of Boeing 737, the 737NG. Boeing hit back
with a major win for its successor, the 737 MAX, in 2012.
Reuters reported this month that the MAX portion of the
latest order could involve as many as 200 aircraft.
The deal would come days after the first flight of the 737
MAX 10, the largest member of the MAX family of which United has
100 on order.
The MAX 10 was launched in 2017 to strengthen the top end of
the portfolio following disappointing sales of the MAX 9, but
Boeing continues to lag Airbus in the key long-range niche.
Boeing is now studying a new model to replace the
out-of-production 757, which overlaps with the A321neo and MAX
10, but is not expected to decide before 2023 as it ponders how
to produce the pair of jets as cheaply as possible.
(Reporting by Tim Hepher, Tracy Rucinski, Eric M. Johnson;
Editing by Kirsten Donovan)
International Airlines (IAG)
