United Airlines bets big on pampering passengers

United Airlines is overhauling its fleet with the biggest jetliner order in company history and an ambitious upgrade for its aircraft cabins, bolstering a push to appeal to more travelers willing to pay for pampering.

The airline agreed to buy 200 Boeing 737 Max jets and 70 Airbus SE A321neo planes, a deal valued at about $15 billion (€12.5 billion) based on estimates by aircraft appraiser Ascend by Cirium.

Those planes and other United single-aisle jets will get a revamped cabin with seat-back screens and larger overhead bins, according to a company statement on Tuesday.

Competition

The plans signal the airline's intention to step up competition with Delta Air Lines and American Airlines for premium-seat customers, who demand more creature comforts and typically generate an outsize portion of industry profits.

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United will also use the new planes to reduce its use of smaller regional jets amid an anticipated rebound in corporate demand, which is still stuck at less than half the pre-pandemic level.

“Business travel is going to come back at 100 per cent and everything we see every week is making us more certain,” United chief executive officer Scott Kirby told reporters ahead of the fleet announcement.

Mr Kirby declined to specify the purchasing discounts that United, one of the world’s largest airlines, obtained from the jet manufacturers. The order includes 50 of Boeing’s best-selling plane, the Max 8, along with 150 of the larger Max 10 jets.

The purchase boosts United’s Max order book to 380, including 30 aircraft that have been delivered, according to the US planemaker. Boeing’s workhorse jet is in the midst of a comeback from a 20-month grounding that was prompted by two deadly crashes.

United previously ordered 50 of Airbus’s longer-range A321XLR aircraft for flights from the US to Europe.

Combined with United’s existing orders from Airbus and Boeing, the purchases will enable the airline to introduce more than 500 new single-aisle jets over the next five years, Kirby said.

Berths

That includes 40 next year, 138 in 2023 and as many as 350 aircraft in 2024 and beyond. By 2026, the larger-plane strategy will boost United’s seats for each departure by 30 per cent compared with 2019 levels.

The gain will be about 75 per cent for premium berths per North American departure. The increased seat count in United’s new fleet will lead to an 8 per cent drop in costs for each seat flown a mile, Mr Kirby said.

The roomy Max 10 and A321neo planes are designed to help United grow at its hubs in Newark, New Jersey, and San Francisco, said chief commercial officer Andrew Nocella.

Those airports, located in highly lucrative corporate-travel markets, are constrained in adding more flights due to limits on aircraft movements in a given time period -- another reason to use bigger planes. “We’re going to compete against all product types out there,” MrNocella said. – Bloomberg