United Airlines has reached an agreement with Boeing to exchange orders for ten 787s with the same number of 777-300ERs as part of a new fleet plan designed to increase the average size and range capabilities of its long-haul airplanes. The deal comes as Boeing aims at a target to sell 60 current-generation 777s a year in an effort to ensure an uninterrupted transition to production of the new 777X in 2018. During the company’s first-quarter earnings conference call on Wednesday, Boeing CEO Jim McNerney said Boeing had collected orders and commitments for twenty-five 777s so far this year, and that the company had sold out all delivery positions for 2016 and roughly half of its positions for 2017.
United also confirmed plans to completely remove more than 130 fifty-seat jets from its schedule by the end of this year. It added that it will remove more 50-seat airplanes next year “and beyond” as their leases expire.
Further widebody fleet plan “refinements” involve a life extension plan for 11 more 767-300ERs, meaning the airline now plans to extend the life of all 21 Boeing 767-300ERs in its fleet through investments in winglets, reliability improvements and interior modifications. The changes will improve financial performance and customer appeal, it said. Meanwhile, United plans to reconfigure and move ten 777-200s now used in international markets into its domestic network, and position “ number” of its transatlantic 757-200s into the domestic and Latin American markets.
Finally, the airline has entered final negotiations involving the lease of 10 to 20 used narrowbodies for delivery over the next “few years” as part of a wider plan to continually add used aircraft to meet its needs “as market conditions allow.”
United said the changes will not affect its 2015 capacity guidance, nor will it alter its current gross annual capital expenditure guidance of $2.7 billion to $2.9 billion over the next three to four years.
“These changes are part of our strategy to improve operational reliability, grow capacity with demand, and enable us to achieve our long-term goal to improve margins and return on invested capital,” said John Rainey, UAL's executive vice president and chief financial officer. “Customers tell us they prefer larger aircraft, and these fleet modifications will provide more opportunity for our customers to travel on the type of aircraft they prefer.”