United Airlines has had an ancient fleet of aircraft and when word leaked that they were going to start refreshing interiors, adding video screens to passenger seat backs, a senior American Airlines executive derided the effort as “prettying up old planes.”
But the refresh is now underway and United has since placed a huge order for 270 narrowbody aircraft and for widebodies as well.
Aviation watchdog JonNYC shares internal slides on United’s plan for refreshing its fleet. The airline expects to grow from 956 planes to 1,386 by 2026.
UA: pic.twitter.com/dV62O723RE
— 🇺🇦 JonNYC 🇺🇦 (@xJonNYC) May 15, 2023
When Scott Kirby took over as United’s President and settled into the role he laid out the need to grow United. They had reduced their domestic flying over the course of several years, but that meant fewer passengers and higher cost per passenger. And flying regional jets instead of larger mainline aircraft, in Kirby’s telling, pushed some premium passengers to fly other airlines as well. And fewer passengers meant fewer credit card signups!
And that’s exactly what has happened. United was flying only around 45% of its departures with mainline, and that grew to 54% last year. It’s now up to 63%. Of course part of the issue now is lack of pilots at regional airlines. But United is planning to shift even more towards mainline, not less as more pilots are trained. By 2026 they see themselves flying 73% mainline departures. This is a broader trend, by the way, as JonNYC notes that pilots at Delta and Endeavor as pushing to have Delta bring Endeavor flying into mainline.
— 🇺🇦 JonNYC 🇺🇦 (@xJonNYC) May 15, 2023
We start to see older planes retired in 2024. Presumably this starts with the oldest Boeing 767-300ERs which will be more than 32 years old. Perhaps the expectation of retiring some of the business class-heavy 767s explains the plan for some new 787s with more business class seats than the current configuration.
This is a big bet. United’s capital expenditures and interest expense will grow significantly. And that’s happening right as the U.S. economy may be entering recession. But if it turns out to be correct, that there’s huge opportunity for increased air travel at a time when there are increased barriers to trade around the world.
Maybe IAD will finally get some love. The connectivity there is painful.
Your last paragraph is key. UA is embarking on a HUGE plan to grow its capacity – but to fix major strategic errors including its over-reliance on 50 seat regional jets and its lack of market strength out side of its key hubs. UA will spend more than 3X what DL is spending and even more than AA and WN.
Every airline is going to fight to hold onto what they have. The DCA and HND petitions that Delta is leading show that there are legal ways for DL to ensure it maintains its strengths and slows UA’s ability to achieve what UA thinks it will do.
Other airlines are receiving new aircraft and holding onto or acquiring used aircraft at a pace that currently exceeds UA.
WN has enormous capacity to grow esp. when they start receiving 737 MAX 7s which they will receive before UA receives its MAX 10s.
And then we have the pilot issue which is driven by new pilot contracts and AA, UA and WN are all slow-walking that process because it will add enormous costs which DL already has in its cost structure but those other 3 do not
UA has been an airline for grand plans and great resets that swing wider than the rest of the industry. By the end of the decade we will know if Scott Kirby’s big bet paid off or left UA in one of its previous sad states
Kirby is following the AA strategy back in 2012 with the huge order . The only reason it worked out was the merger with US Airways. The don’t have hubs that will support the growth, they will need to open a southern hub and a Northwestern hub or expand LAX (which they can’t) to make it work. UA still has a reputation issue and even with AA smaller in NYC, they are a preferred business airlines over UA as is DL. I would replace and not remodel their A319/A320 and older 737 fleet verses trying to grow to this extent and take on this much debt before a global recession or at least slow down.
Seatback screens are a huge waste of $ too. They just want to scream, we are just like DL verses setting up their own experience like AA, AK or WN. Be true to your brand and stick to it, don’t try to be a copy, never works out well.
@sunviking82, I’m confused by your advice to not copy DL by installing seatback screens. If UA doesn’t install them, won’t they just be copying AA and AS since they don’t have them either? It seems like upgrading your customer experience is a good thing.
Even with the screens, UA will still over entertainment that can be streamed to your personal device, so it’s the best of both worlds.
United has catered its Mileage Plus program entirely to OPM flyers.
So if work flying declines or doesnt come back as strong, its not good news for United
Its nice to have big plans, but one economic shock, a drop in demand, especially amongst OPM flyers, and your plans are garbage.
On the widebody side, their strategy is not that aggressive when you consider how many 757/767 and 777 are in production.
On the narrowbody side…Many narrowbodies will be used for routes that in the past were only served by widebodies. 5 years ago, the only carrier that regularly ran East Coast to Europe flights was Icelandair. Not today. The consumer will generally pick the carrier assuming similar price points with higher frequency service.
You’re running on the assumption that fuel prices stay relatively low. If prices shoot up, the less efficient planes will retire on a more aggressive schedule.
It’s not as aggressive as reported to me.
@Tim Dunn,
You left out one important word – “mainline” – in your comment. United is growing its **mainline** capacity. It’s replacing much of its regional capacity with mainline aircraft – much as the world’s only “perfect airline” has been doing over the last few years (which you seem to think is a perfect strategy). Please prove (don’t just write) that United’s use of 50 seat aircraft over the last 30 years has been a “major strategic error”. If that’s the case, the “perfect airline’s” use of those same aircraft over the same period was also a “major strategic error.” Times are changing. There’s been a general upgauging trend in the industry in the last few years. Fewer, larger aircraft require fewer pilots. Larger aircraft also tend to lower unit costs. It’s simple math.
DCA and HND have nothing to do with this topic. And comparing UA’s acquisition program to others is useless. Each carrier has to deal with its own unique situation. In the end, if United can continue to generate enough free cash flow to finance its operations and capital improvements, that’s all that’s needed.
Regarding United’s history: None of that matters. The fact that the world’s only “perfect airline” had to file for Chapter 11 doesn’t matter either. This isn’t 1978, 1998, or 2008. We agree on one thing – one way or another, we’ll find out if United’s major capital expenditure ultimately pays off.
take a deep breath son.
UA failed to invest in new aircraft so has the oldest fleet in the US and ALSO was wedded to regional jets.
They are paying the price and will pay a much higher price than anyone else in order to update their fleet.
They simply won’t be adding as much capacity as alot of people think because they will have to replace older aircraft and regional jets.
And other airlines DO and WILL do what they have to do in order to succeed in competing against UA – which is exactly what both the DCA and HND cases are about.
If you don’t see it now, it will become apparent later on.
Until they pay the pilots properly, United “next” will be United never.
sunviking82: A fine Northwest hub for United would be Seattle. For most of my life I lived in two major United hubs – San Francisco and Washington DC (Dulles) – and going anywhere on United was easy. Now I live in Seattle and United is fairly minor here; Alaska and to a lesser extent Delta dominates. In general I would rather fly on Airbus aircraft so the “Proudly All Boeing” airline is not as appealing. When the old A319s and A320s on United get to end of life I hope they will be replaced by the same.
Mr. Kirby will need buy in from his “Flight Deck Leaders,” which currently he is setting on fire with a blow torch.
carletonm,
the day that UA tries to add an international longhaul flight from SEA will be the day that DL adds flights from EWR and SFO to Europe and Asia esp. ICN.
Thankfully, UA knows that. LAX is the battlefield between DL and UA.
Carletonm: I think you’re overstating the importance of Seattle to United. The only reason DL is there is because they had no SFO and they can’t dominate LAX. Otherwise, Seattle would have remained a mostly domestic airport, hubbed by AS, a mostly domestic carrier, and basic service from foreign carriers.
@ sunviking:
United is ALREADY starting their growth at LAX even without the new T9 gates. BNE and AKL? Imagine when T9 comes online. It’s a matter of time.