United Airlines to Buy More 737 Max Planes

United Airlines to Buy More 737 Max Planes

United Airlines (NASDAQ: UAL) announced Monday it is set to buy an additional 25 Boeing 737 Max planes as it seeks to prepare itself for the anticipated recovery. The transaction is a vote of confidence in the planes, after the aircraft experienced many trials and tribulations amid past malfunctions.

“As we plan for the future and the return of demand, we’ve been looking at ways to best position our fleet for the recovery and be in a position to best take advantage of people’s desire to travel,” Andrew Nocella, United’s chief commercial officer, said in a note to staff.

The 737 Max planes are scheduled to be delivered in 2023, furthermore the airline pushed forward the delivery of 40 previously ordered Max jets to 2022. According to a securities filing, United is committed to acquiring a total of 188 Maxes. 

“These new aircraft are going to allow us to be more competitive,” said Nocella. “It’s the right aircraft at the right time.”

Throughout the pandemic United, similar to other airlines, struggled financially. The airline lost over USD7 Billion in 2020 as travel demand plummeted. Though travel demand is expected to remain low in the first half of 2021, United is preparing for a recovery amid vaccine rollouts.

“And as the end of the pandemic nears and vaccines continue to roll out, today’s fleet announcement helps position us to meet the demand we expect to see in 2022 and 2023 and puts us on a path toward more opportunities for our employees in the future,” wrote Nocella.

Boeing shares rose 6% and United was up almost 5% throughout a broad market rally.