United Air Orders 51 Jets From Boeing and Airbus
May 05, 2011
UAL Corp.'s United Airlines said it ordered 51 jetliners from Boeing Co. and Airbus Industrie valued at about $4.4 billion, including a crucial order for smaller planes from Airbus. All the new planes are to replace older jets in United's fleet. The orders, which had been expected, included 27 larger Boeing 747, 777 and 757 planes valued at about $3.5 billion based on the list values. While word of the orders had leaked out in recent months, it wasn't clear until just before United's announcement late Thursday that the Airbus consortium had won orders for 24 smaller A-319 planes valued at about $900 million. The order for the 126-seat Airbus planes, which were pitted against Boeing's 737 line, represents a particular coup. In the early '90s, Airbus had broken Boeing's grip on United's fleets by winning an order to place as many as 50 of Airbus's 150-passenger A-320 planes at the airline. That deal included an option by United to return the planes to Airbus if the carrier chose to do so. So, the latest contest stood as Boeing's chance to stop Airbus's encroachment at United -- and perhaps to dislodge the European producer altogether, if the carrier could be persuaded to shed all its Airbus planes. A spokeswoman for Boeing said that while the jetmaker wanted to sweep the entire order, ``we're pretty pleased'' with landing the big-jet orders that accounted for much of the total value. A United spokeswoman said only that the carrier selected Airbus over Boeing for small jets because ``the offer was more competitive from a price standpoint.'' A U.S. spokesman for the Airbus consortium allowed that the A-319 order was ``a hard-driven deal,'' but he also suggested that Airbus successfully promoted to United the savings to be realized in training and maintenance costs because the A-320 and A-319 have common systems. The Boeing order includes 19 of the planemaker's 747-400s, six of its 180-seat 757s and two big two-engine 777s. United is believed to have reserved options that will allow it to convert some of the 747 orders to new long-haul and high-capacity versions of that plane that Boeing could decide to offer. The $4.4 billion in total value placed on the planes is based on list prices made public by the manufacturers, but a big buyer such as United enjoys deep discounts from those list prices. United said in its announcement that it ``benefited from substantial discounts.'' All the Boeing and Airbus planes will delivered by 2017. Separately, United Parcel Service of America Inc. said it ordered five Boeing 757-200s in a deal valued at more than $300 million. The order brings to 20 the total number of 757s on order from Boeing for delivery through 2013 to United Parcel's airline subsidiary. UPS, the privately held delivery company based in Atlanta, said it was also advancing to next year the delivery of a Boeing 767-300 originally scheduled for delivery in 2015. --Quesada Y. Collin contributed to this article.
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