August 2012

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Down to Two: United weighs its widebody options

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PODCAST: I discuss the United order with Addison Schonland of IAG and Julie Johnsson of the Chicago Tribune.
Late last week, The Chicago Tribune reported that United Airlines had narrowed its options for the first phase of its wide-body fleet renewal to two choices: The Airbus A350 XWB and Boeing 787 Dreamliner.

There are pros and cons to the selection of each model, but what cannot be avoided here is the historic relationship between Boeing and United Airlines that finds its roots at origin of both companies.

Boeing - once named the United Aircraft and Transport Corp. - was split up as part of the Air Mail Act of 1934 that created three separate companies: United Airlines, United Aircraft, the Boeing Airplane Co. United Aircraft would later go on to be known as United Technologies, parent company of engine maker Pratt & Whitney.

The creation of the 727, 737-200 and 767 saw the continued collaboration of these three companies. These new types were powered by Pratt & Whitney engines and launched with orders from United Airlines. In October of 1990, United again served as launch customer for a new Boeing type powered by the P&W engines. The order, which at the time was the largest in commercial aerospace history, was valued at $22 billion and launched the 777 with a firm order for 34 plus 34 options.

Flash forward 20 years and United again returns to the negotiating table with Boeing on a wide-body order, this time to renew the airline's fleet (and its image) for the first half of the 21st century. There are a lot of considerations for United to consider when selecting a new fleet, let's take a look at their remaining options.

The Case for the A350
Though an inelegant replacement for the 767-300ER, the A350-800 fits with United's fleet as a chance to take advantage of the trend in up-gauging aircraft while reducing overall capacity. For example, five 244 seat 767-300ER flights can be consolidated into four 270 seat A350-800s. The A350 family offers models in the -900 and -1000 that can also replace both the 777-200/200ERs and 747-400s in a single common platform. The commonality between all three variants offers flexibility for United's pilots, as well as consolidating three wide-body aircraft types into one while streamlining maintenance and operations. 

Across the Pacific to Australia, United can leap frog over Delta (777-200LR), V Australia (777-300ER) and QANTAS (A380) with the A350-1000 while going from a four engine to a two engine platform with next-generation technology. The investment new United business class interiors suggest that the airline is in no rush to retire its existing wide-body fleet, meaning the 2013-2015 EIS for the A350 family variants makes the timing attractive to coincide with fleet retirement.

The Case for the 787
Even with the 787 potentially being overweight, the -8 will offer superior fuel burn performance on same-sized routes currently flown by the 767-300ER by comparison. As the oldest aircraft currently in the fleet, United's 767-300ERs are the first candidates for retirement. The A350 is too large to act as a suitable replacement for this aircraft. By Airbus' own admission, the A350 covers the larger 787-9, 777-200ER and 777-300ER market more than the 767 market. The training commonality between the 777 and 787 also offers an advantage for crews transitioning between types.   

Implementation plans for 787-8 with airlines like QANTAS and Ethiopian have shown these carriers' intention to deploy the aircraft as a replacement to routes currently flown by 767-300s. Not only can the 787-8 act as a replacement for the 767 fleet for trans-Atlantic routes, but the aircraft could open lower density long-range flights to China, India or Japan. The 787-9 could also replace the 777-200ERs flying with 258 seats on long-haul segments to Asia offering greater efficiency in an optimized platform. The 787-3 in a high-capacity medium haul role also would also be ideal for high-density routes for vacationing travelers to Hawaii from the west coast, acting as a replacement for the older shorter-range 777-200s that fly the routes today.

The 787 could also be available earlier to United than any A350 variant with the Charleston 787 final assembly line coming online in 2012. While initially sized for three aircraft per month along with Everett's seven per month, Boeing could hold the surge line in place or potentially boost Charleston to meet the demand of early delivery dates.

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