Next large aircraft order: United Continental?

[sn26567]

There is much speculation about an order for some 150 medium-haul aircraft by the largest airline in the world: United Continental. The Boeing 737 (MAX) and the A320 (NEO) are the models for which Boeing and Airbus are lobbying intensively to get the order. The deal could include 130 of the new models designed to cut fuel, and up to 50 existing models to close the gap between now and the time when these new models will arrive on the market.

It is expected that the deal will be signed in December or in early 2012.

More from Reuters: http://www.reuters.com/article/2011/11/ ... 4620111122

[DeltaWiskey]

On a side note, isn't the name of the airline just "United Airlines" after the merger?
(Though, "United Continental" is the name of its parent company IIRC)

[SN_fan]

I though they were now just called "United" ...

[sn26567]

The airline is indeed called United, but the parent company that will purchase the aircraft is United Continental Holding.

[Bralo20]

The airline is indeed called United, but the parent company that will purchase the aircraft is United Continental Holding.

For the time being that is

I hope they end up with Airbus since I do prefer the A320 series above the 737...

[DeltaWiskey]

...but the parent company that will purchase the aircraft is United Continental Holding.

What makes you say this? AFAIK it is the airline that purchases the aircraft...

[sn26567]

First sentence of the Reuters article: "Airbus and Boeing are bidding to sell around 150 jets to United Continental".

[flightlover]

...but the parent company that will purchase the aircraft is United Continental Holding.

What makes you say this? AFAIK it is the airline that purchases the aircraft...

The holding can also buy them. And then lease them to the airline. This way, when the airline goes bust the holding still has the planes to start a new one or to sell/lease to others.

I'm not in favor of this way of doing business.

[Bralo20]

What makes you say this? AFAIK it is the airline that purchases the aircraft...

Well, that's not exactly correct. It depends if the airline is just an asset of an holding company or not. AFAIK United Airlines was part of United Corporation (now United Continental Holdings) while Continental Airlines was part of Continental Airlines Holdings. Just like American Airlines is part of AMR Corporation.

In case of United Airlines it will be United Continental Holdings that will be the buyer (or lessor) of the planes and not United Airlines itself. In case of American Airlines it was AMR Corporation which placed the orders by Boeing and Airbus.

[DeltaWiskey]

In this case, I thought it was the airline that had issued the RFP and was going to purchase them, not the holding. I think I got confused somewhere...

This way, when the airline goes bust the holding still has the planes to start a new one or to sell/lease to others

It is not that simple. The holding can still be held liable if the daughter files insolvency. It's more for taxation reasons the airplanes are owned/bought by a holding. But this is not always the case.

[RoMax]

Maybe talk about the order itself and not about who is going to place the order as the aircraft will end up in the same airline anyway.

I think there is a high chance we may see a split order, or even this one going almost completely to Airbus. United has some quite old A320's wich need replacement in the comming years (so probably the current versions they want to order) and the others, including the oldest 737's of CO need replacement later (new versions, NEO or MAX). But the 737 fleet of CO is quite new, so the A320's of UA need replacement first, and I think there is a very high chance UA will stay with the A320(NEO). When they want a 737 replacement for the CO's, I think they will also order 737MAX. United is big enough to buy both and buying both could be in their advantage (faster deliveries from two companies than from one, better contacts with both constructors for future orders, lower need to train 737 pilots to A320 or the other way around, ...)

[Conti764]

I think there is a high chance we may see a split order

I think the same... A split order for both the NEO and the MAX... The NEO to replace aging UA's 320's and MAX to replace CO's aging 737's. The company is big enough to sustain both types and both pilot and crew groups are too big just to train them on another type of aircraft, let alone maintenance costs,...

The best option for a company the size and structure of UA is to order both.