United Surprises With Fleet Acquisition Plan
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Darren Shannon darren_shannon@aviationweek.com
United Airlines has approached both Airbus and Boeing to discuss a replacement plan for its widebody fleet of 747s, 767s and 777s, and is talking with both company's about a possible successor for its 757 transcontinental aircraft.
In an internal memorandum sent around today, Chairman, President and CEO Glenn Tilton told employees a request for proposal had been sent to both manufacturers that could result in an order as soon as this fall.
Although few concrete details are discussed in the note, it is understood the RFPs could amount to as many as 150 aircraft, roughly 40% of the fleet United expects to operate at the end of 2009.
However, Tilton does caution that such a dramatic fleet decision has conditions. "We have had ongoing discussions with both manufacturers for the last several years, and, as we have consistently said over that time, we will not invest in aircraft until we believe we can generate a return on our investment," said the chief executive.
"The decision of whether to move ahead with new aircraft will be based on facts and analytical rigor. In addition to earning a return, any aircraft order must be financed in a way that strengthens our balance sheet over the long term and does not impact our cash position. We must also be able to retain fleet flexibility for the long term," added Tilton.
Reports suggest United's acquisition could total $10 billion.
Ignoring these significant conditions, United's plan could drastically revise the carrier's operations, which currently rely on 35 Boeing 767-300s, 53 777-200s and 24 747-400s to serve its long-haul markets and 97 757s to maintain its medium-haul network.
"This work clearly presents a strategic opportunity for both United and the manufacturers, as this program will define our fleet strategy for the next 25 years," noted Tilton. "Our timing is opportune, as this is a competitive environment for manufacturers, and, if the economics are compelling, the winner will place its new generation aircraft with one of the largest operators of twin-aisle aircraft in the world."
Boeing currently offers one such new generation widebody aircraft, the 787, although it is generally accepted a replacement for the popular 777 - an aircraft United has operated for the past 15 years - is forthcoming. The U.S. manufacturer's 747-8 Intercontinental is also under development and currently has just one customer, United's Star Alliance partner Lufthansa.
Airbus' newest aircraft is the superjumbo A380 and the European manufacturer is currently developing the A350 as a direct competitor to the 777.
"An aircraft order that meets the requirements we have outlined will provide the opportunity to further improve our cost structure and better our operational performance while reducing our environmental impact and creating an improved onboard experience for our people and our customers. Next-generation aircraft also provide the capability to serve new destinations and further strengthen our network," Tilton told the employees.
Although route expansion is considered, United is noncommittal to how a new fleet will replace the exiting widebodies and 757s, or how many models the airline plans to operate. Currently, neither Airbus nor Boeing offer a direct new generation replacement for the 767-300 or the 757 family, although several 737 variants and the A321 meet 757 specifications. United currently operates A319s and A320s as well as an aging fleet of 737s, although all the 737s will be retired by the end of this year.
"Clearly, new aircraft provide us the opportunity to tailor and customize the customer experience, building off of the work we have done to reconfigure our international fleet," said Tilton.
United's RFPs come several months into talks for a new pilot contract. The current agreement becomes amendable at the end of this year.
Photo credit: Airbus
