United to shift to biggest Dreamliner, A350s

  • By Julie Johnsson, Mary Jane Credeur and Andrea Rothman Bloomberg News
  • Saturday, June 15, 2013 9:21am
  • Herald Business Journal

United Airlines is in talks to buy the largest versions of the Boeing Co.’s 787 Dreamliner and Airbus’s A350, making it the first U.S. carrier to fly the new long-haul jets, people familiar with the matter said.

The carrier will modify a 2009 order to take 25 wide-body A350-1000s instead of the smaller -900 variant as once planned, said the people, who asked not to be identified because the discussions are private. United also will convert options for a couple dozen A350s and Dreamliners into firm orders, with the Boeing jets being the new 787-10X model, the people said.

United’s possible shift is a boost for both planemakers ahead of next week’s Paris Air Show. Chicago-based Boeing is targeting the new Dreamliner to compete with the A350-900, while Toulouse, France-based Airbus is touting the -1000 over its U.S. rival’s 777, the world’s largest twin-engine jetliner.

Switching to A350-1000s would increase the value of United’s 25 order conversions by 15 percent to $8.3 billion, based on list prices before the discounts that are typical in the industry. The -1000s seat 350 passengers in a typical three-class configuration, compared with 314 for the A350-900. The 787-10X will seat about 43 more people than the 250 to 290 passengers on the 787-9, Boeing has said.

United hasn’t settled on an allocation of the options being converted to 787-10X Dreamliners and A350s, the people said.

United, a unit of United Continental Holdings, is stocking up on new aircraft as it looks to replace its oldest Boeing 747s and expand overseas. The carrier has been in talks with Airbus about buying A350-1000 jets since last year, people familiar with the matter said in October.

Boeing hasn’t published a price yet for the 787-10X. Singapore Airlines agreed last month to take 30 of the 787-10X Dreamliners in an order split with Airbus whose valuation implied a catalog price of about $279 million.

“We don’t comment publicly on our conversations with customers,” Marc Birtel, a Boeingspokesman, said yesterday when asked to comment about the talks with United. Mary Anne Greczyn, a spokeswoman for Airbus, declined to comment.

Planemakers are courting almost 30 airlines worldwide that are exploring placing large orders collectively valued at about $185 billion, Howard Rubel, a New York-based equity analyst with Jefferies, said Friday in a report to clients.

Some of the pending deals will close during the Paris show, with other campaigns dragging into next year, Rubel said. The expo begins June 17 and is the industry’s biggest annual showcase for new models.

As the A350 completed its four-hour maiden voyage Friday returning to southwestern France, Airbus executives vowed to challenge Boeing’s supremacy of the wide-body market.

“We want more than 50 percent of this market and we will have more than 50 percent of this market,” Airbus CEO Fabrice Bregier said of the estimated 6,000 wide-body plane sales up for grabs over the next 20 years.

United is the only U.S. carrier to fly the composite plastic Dreamliner so far, and has 49 of the smaller Boeing 787 models on order, according to its most recent quarterly regulatory filing. Six of them have been delivered so far, and two more are scheduled for delivery before year’s end.

US Airways Group and Hawaiian Holdings are the only other U.S. airlines with A350s on order.

The Wall Street Journal reported June 13 that United might be a customer for the 787-10X.

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