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United Airlines To Buy 50 Airbus Planes For European Route

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United Airlines To Buy 50 Airbus Planes For European Route

United Airlines (NASDAQ: UAL) has made a firm order for 50 Airbus A321 extra-long-range aircraft to replace older, less efficient Boeing 757-200 aircraft, enabling a planned expansion of transatlantic routes from its East Coast hubs in Newark, New Jersey/New York and Washington Dulles International Airport.

United said late Tuesday it plans to begin taking delivery of the single-aisle A321XLR and introduce it into international service in 2024. It also will defer delivery of its order of widebody Airbus A350s until 2027 to better align with its operational needs.

United was scheduled to receive 45 A350-900 jetliners between late 2022 and 2027 to replace its fleet of Boeing 777-200s. Adjusting the delivery time of the A350s in favor of the A321s could mean less cargo capacity for freight forwarders, depending on what planes in its fleet it continues to use.

"In addition to strengthening our ability to fly more efficiently, the A321XLR's range capabilities open potential new destinations to further develop our route network and provide customers with more options to travel the globe," said Andrew Nocella, United's chief commercial officer, in a Dec. 3 statement. 

Airbus launched the longer-range version of the A321 neo last summer. The increased fuel efficiency and range (4,700 nautical miles) of the next evolution A321 will allow service from the U.S. East Coast to a much larger selection of European destinations, according to Airbus.

The new aircraft lowers overall fuel consumption per seat by about 30% compared to previous generation aircraft, helping both the bottom line and United's goal of reducing its carbon emissions by 50% relative to 2005 levels by 2050.

Combining the A321 neo's two rear center fuel tanks into one adds fuel capacity and reduces structural weight. A321 neos list for about $129 million, but airlines typically negotiate discounts for large orders.

United currently operates 99 aircraft from the neo family. Neither company indicated whether the planes would be built at Airbus' plant in Mobile, Alabama, in Europe or at some combination of locations. But Mobile offers potential supply chain savings and a relief valve for busy European plants, making it a likely production site for many, if not all, of the planes.

U.S. production would also avoid any U.S. tariffs on imported aircraft from Europe. Commercial aircraft made in Europe have been subject to a 10% tariff since mid-October after the U.S. received the green light from the World Trade Organization to impose tariffs on European Union goods as a remedy for years of illegal state subsidies to Airbus. The tariffs would significantly add to the cost of any aircraft but may not be a factor by the time United begins to take delivery if leaders are able to settle broader trade differences. Such a resolution may be easier with a Democrat in office as President Donald Trump has harped on the EU's trade surplus, especially in autos, as a reason for following protectionist policies.

On Tuesday, the WTO rejected EU claims that it no longer provides subsidies to Airbus and therefore is not harming Boeing. A WTO compliance panel ruled that Boeing sales will continue to face market-share threats as Airbus continues to produce the jumbo A380, even though the company has decided to stop making the slow-selling plane. The decision means that the U.S. retains the right to impose tariffs on the EU.

As FreightWaves previously reported, U.S. airlines with near-time deliveries from Airbus could be on the hook for millions in tariffs unless Airbus eats some of the costs.

In June, American Airlines also ordered 50 A321XLRs, including the conversion of 30 previous American A321 neo production slots to the longer-range version.

Image Sourced from Pixabay

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