United Airlines Eyes Fleet Shift Amid Boeing Max 10 Uncertainty: Report
Portfolio Pulse from Shivani Kumaresan
United Airlines Holdings Inc (UAL) is reportedly finalizing negotiations to acquire approximately three dozen Airbus SE's (EADSY) A321neo jets from lessors, aiming to replace delayed Boeing Company (BA) 737 Max 10 orders. The delivery of these jets is expected between 2025 and 2027, a move driven by certification delays in Boeing's Max 10. United's CEO, Scott Kirby, stated that any agreements would depend on favorable economics and advised Boeing to concentrate on the Max 9 until the Max 10 receives federal certification. This strategic shift to Airbus could give the European manufacturer a competitive advantage over Boeing, especially as United was a significant initial customer for the Max 10.
March 15, 2024 | 10:54 am
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POSITIVE IMPACT
Airbus SE is in the final stages of negotiations with United Airlines for the sale of around three dozen A321neo jets, set for delivery between 2025 and 2027.
Airbus securing a deal with United Airlines for the A321neo jets represents a significant win over Boeing, especially as United was a key initial customer for the Max 10. This deal not only enhances Airbus's order book but also strengthens its position in the market against Boeing. The positive impact on Airbus's stock (EADSY) in the short term is likely due to the market's favorable view of expanding Airbus's customer base and the financial benefits of such a large order.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90
NEUTRAL IMPACT
United Airlines is close to acquiring Airbus A321neo jets to replace Boeing 737 Max 10 orders due to delays. Delivery is planned for 2025-2027.
United Airlines' decision to potentially acquire Airbus jets instead of waiting for Boeing's Max 10 could be seen as a strategic move to ensure fleet modernization and expansion on schedule. However, the impact on UAL's stock price in the short term is neutral, as the benefits of this fleet update are more long-term and the market may have already anticipated such strategic adjustments.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
Boeing faces delays in the certification of its 737 Max 10, leading United Airlines to consider Airbus A321neo jets as replacements.
The certification delays of Boeing's 737 Max 10 have direct negative implications for Boeing (BA), as it not only affects its relationship with United Airlines, a major customer, but also gives its competitor, Airbus, a significant advantage. The short-term impact on Boeing's stock price is likely negative due to the potential loss of orders and the broader implications for Boeing's ability to compete effectively in the market.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 90