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United Airlines CEO Scott Kirby said on Tuesday that the airline has great flexibility over the next few years. Speaking at the Wolfe Research Transportation & Industrials Conference, he commented on the airline’s continued flexibility, although it expects to see a continued rebound in leisure and business travel.
United Airlines has a lot of flexibility
United Airlines CEO Scott Kirby said the following during the flexibility conference:
“We have 275 planes coming in the next […] three to four years during which we could either retire on a regular schedule or retire early. Early retirement is before you get to any of the later stages, like the heavy fourth check or an engine overhaul, where it’s actually P&L and NPV, basically breakeven, to pull out the plane earlier and collect it for coins instead of spending money to do so. airframe and engine overhauls.
“So we have 275 planes of flexibility, if something happens – of course we don’t think it’s going to happen.”
Essentially, United Airlines has the opportunity to make significant changes to its fleet in the years to come if necessary. Mr Kirby did not mention specific triggers that could prevent the return of business travel or cause the airline to change its fleet plans in favor of retirements.
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Which plane could United watch?
United have a range of jets that they could consider retiring early if necessary. This includes everything from narrow Airbus bodies to older Boeing 737s, 757s, 767s or 777s.
The argument in favor of removing the Airbus or Boeing fuses would mainly be the replacement of the fleet by the delivery of Boeing 737 MAX planes. These new jets, which are also larger in size than the Airbus A319 or Boeing 737-700, would allow United to make much-needed tonnage increases while reducing costs.
On the other hand, large carriers would be more concerned with a slower or lessened return of international demand. Another argument relates to Boeing 787 deliveries. Although the airline is nearing the end of its 787 delivery schedule, these planes could help speed up the withdrawal of the Boeing 767s.
United has an order for Airbus A350s. These jets, now postponed until 2027, were previously expected to replace older jets like the Boeing 777-200ER. However, it is questionable whether United will even take the plane or decide to stick with the Boeing 787 and increase their orders for the jet type.
The Boeing 757s already have a replacement on order. United chose the Airbus A321XLR to replace these jets. Meanwhile, he can look to the Boeing 737 MAX 10 to fill some of the national gaps with the retirements of the 757.
Ultimately, if United decides to pull those 275 planes out, the issue will be less about perfect one-to-one aircraft replacement and more about streamlining the fleet to meet short-term needs for cost reduction and readiness. to a new type of network.
United’s fleet left intact in 2020
United Airlines actually left 2020 with more jets than needed to start the year. The airline has resisted the trend of airlines like Delta and American, which removed hundreds of aircraft from its fleet in 2020.
The math around the fleet was to make sure they had the plane to perform the recovery. It is much more difficult to quickly add a new jet than to bring back a parked jet if demand warrants it. With the demise of other airlines and structural changes in aviation, United Airlines believes it will be in a good position to bring back all or most of its international network.
With that in mind, it would take a pretty seismic change in the market for United to bring down more of these planes. Some must retire in the natural airline cycle, but early retirements are usually reserved for the most urgent and necessary retirements.
Do you think United have been smart about keeping their fleet flexible over the next few years? Let us know in the comments!
