United Airlines, a subsidiary of UAL Corporation, has ordered for 25 Boeing 787-8 aircraft from Boeing and 25 Airbus A350-900 XWB aircraft. The orders are worth $4 billion and $6 billion, respectively, at list prices. Following the purchase, UAL Corp. will be the second US carrier to operate the Airbus A350.
United Airlines intends to reduce fuel burn on typical flights by up to a third, saving 175 million gallons of fuel per year. The company also aims to simplify maintenance by reducing the number of classes of aircraft used on United’s network. The 787 will replace the 767 (aging approximately 14 years), while the larger variant of the A350 will replace the 747 (aging approximately 13 years).
Ultimately, United intends to fly only two types of wide-body aircraft – the 787 and the A350, with variants of one or the other replacing the Boeing 777. No specific timetable has been announced as to the replacement of the 777 fleet (age approximately 10 years) as yet. Narrow body replacement bids are expected to begin in 2010.
As of Oct 31, 2009, United Airlines operated 360 aircraft with an average fleet age of 13.5 years. During the third quarter, United Airlines reported a net loss of $57 million, a significant improvement as compared to a net loss of $792 million in the year-ago period.
The most significant changes were lower fuel expense, including related fuel hedge impacts, besides lower revenues due to capacity reductions and the severe global recession. United Airlines is implementing several new initiatives that are expected to improve revenue performance.
Furthermore, cost reduction initiatives are expected to shave about $300 million from the company’s cost structure in 2009. This will include streamlining operations by reducing the airlines’ frontline workforce by more than 9,000 employees by the end of 2009.