August 2012

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Reports: Boeing and Airbus to split United Airlines order

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Both the Wall Street Journal and are reporting that United Airlines is set to announce a 50-aircraft order split between both Boeing and Airbus. The reports suggest that United has purchased 25 787 Dreamliners and 25 A350 XWBs with options for more to follow.

Neither report specifies the variant or delivery dates for each type selected, but could have significant implications for each airframer. Early indications exist that United has selected the 787-8 and A350-900, but this remains unconfirmed.

Boeing CEO Jim McNerney visited Charleston late last week and "let slip" that the company held 840 orders for the 787 "with more to come by the end of the year," says a person who was present for his comments and belived the remark was a potentially subtle allusion to the United order.

First, it's important to establish that in a easing global recession, an order for 50 firm wide-body aircraft, even one that is split, is an impressive sign of the potentially changing fortunes of the commercial aircraft market for both Airbus and Boeing and represent major victories in a time when orders of this size are few and far between.

Though for Boeing, a split buy is a troublesome sign for the 777. In the most direct sense, the airline that launched the 777 had an opportunity to reinvest in the aircraft and declined. This could hasten the ascent of a next generation 777 or an equivalent option in the 305-365 seat segment.

For Airbus, while it has made significant inroads into the 777 market, its flank remains exposed where the 787 excels. The A330-200 remains an option for interim lift aircraft as airlines wait for their 787s or smaller A350s, but the reality is that the 220-270 seat market is extremely vulnerable for Airbus in the long run.

Now let's see if these reports become reality, but I'm left wondering: How does this help United control its costs? Why order one type when you can order two for twice the price?
ALSO SEE: Down to Two: United weighs its wide-body options & Travel Options by United: A guide to fleet renewal.

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