United Airlines Bets Big On Premium Post-Pandemic Travel With Its Largest Ever Jet Order

Topline

United Airlines has ordered 270 new aircraft and plans to reconfigure its existing fleet, the company announced Tuesday, as part of the airline’s pivot towards higher-paying premium travel as the hard hit industry explores ways to recover from Covid-19.

United Airlines is expanding its fleet.

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Key Facts

The Chicago-based airline has placed its largest ever order for 200 Boeing 737 MAX and 70 Airbus A321neo jets, which will be used to replace retiring jets and expand its fleet.

United said the order will create 25,000 jobs by 2026 and, along with the renovations to existing craft, allow it to grow the number of premium seats by 75% from before the pandemic.

The move will also see screens return to the back of United’s seats, something it had previously moved away from, bigger storage for cabin bags and more spacious craft between business destinations in an attempt to woo business travelers.

CEO Scott Kirby said the changes “will revolutionize the experience of flying United” and “accelerate our business to meet a resurgence in air travel.”

Pre-market trading shows shares for United up by 0.11% at the time of writing, having recovered from an initial drop following the announcement of the reportedly more than $30 billion expense, according to the list price.

Airbus is up 0.11% and Boeing 2% in pre-market trading.

Key Background

Combined with existing orders, United expects to be bringing on more than 500 new jets between now and 2026, boosting its domestic capacity by 30%. United, alongside other U.S. carriers, may struggle to meet the growing demand as restrictions lift, having lost too many craft or employees during the pandemic. Pilots could be a particular issue, with staff cuts during the pandemic exacerbating long standing shortages, and United has launched its own initiative to train new ones.

Tangent

United has moved to adopt one of the U.S.’ more stringent vaccination policies. It will soon require crew flying to high-risk countries like India, Brazil and Chile to be fully vaccinated and, along with Delta, will need new employees to prove they have been fully immunized. Kirby wants to make vaccines mandatory for all United Airline’s staff but said it can only “realistically” do so if it is joined by other U.S. airlines.