United Airlines Is Ready for Takeoff
United Airlines Spends $30 Billion to Grow its Fleet
United Airlines (UAL) recently placed its largest airplane order ever, contracting with Boeing (BA) and Airbus (EADSY) to purchase 270 new planes. United is buying 200 MAX jets from Boeing and 70 SE A321neos from Airbus in a transaction worth more than $30 billion, excluding discounts. The airline operator wants to replace the majority of its 50-seat planes and other small aircraft with the larger planes, which will enable the company to sell more higher-priced tickets.
The purchase order is the biggest the airline industry has seen since American Airlines (AAL) bought 460 aircraft from Boeing 10 years ago. It also signals that United Airlines expects demand for travel to continue to surge after more than a year of pandemic restrictions.
United Airlines Bets on Pent-Up Demand
When combined with orders United previously placed, the airline will have 500 new jets in its fleet in the coming years, increasing flying capacity by 4% to 6% per year. With the new planes, United will add close to 30% more seats on domestic flights and 75% more first-class seats. United said that 200 of the planes are for new flights, while 300 will replace aircraft which United is retiring.
The big purchase order comes at a time when business is improving for United after it lost more than $7 billion in 2020. The airline expects to be profitable in July—for the first time since January 2020.
United to Hire 25,000 Workers
In addition to placing a large purchase order, United plans to hire 25,000 union workers by 2026, increasing its headcount by more than 36%. As it stands, the airline has around 68,000 union workers. United plans to spread the new jobs out across its major hubs including Newark, San Francisco, Washington DC, Chicago, Denver, and Los Angeles. United and other airline operators have started hiring again after furloughing pilots and tapping government aid to keep workers on payroll during the pandemic.
After being battered by the pandemic, the airline industry is preparing for a massive uptick in travel in the coming years. They are pouring money into upgrading airplanes and hiring more staff, hoping for clear skies ahead.
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