UAL - Soliciting New Airplane Order

[J]

Excerpt:

The Wall Street Journal reported that UAL Corp's (UAUA.O) United Airlines had asked Boeing (BA.N) and Airbus (EAD.PA) to put forward competing bids for up to 150 new airliners, contrasting with many who are axeing or delaying purchases.

The deal could be worth more than $10 billion for the two aircraft makers, the newspaper said, adding that United sent a formal request to Boeing and Airbus on Tuesday.

Airbus declined comment but shares in parent EADS (EAD.PA) initially rose more than 2 percent before trimming gains.

Most airlines are shedding capacity to cope with a steep fall in demand and many have deferred orders to conserve cash and in the absence of financing for final delivery payments.

Source: http://www.reuters.com/article/BANKSL/i ... 8620090604

[Verbal]

Not surprising that UAL is putting out requests for proposal. After two trips through the bankruptcy revolving door, their average fleet age is now 53 years. They're still flying Boeing 247's on some routes. Cripes.

[flyboy2548m]

Considering that this is an airline whose entire business plan hangs on hopes of a merger, this development is rather strange.

[David Hilditch]

Considering that this is an airline whose entire business plan hangs on hopes of a merger, this development is rather strange.

Do you still think they're looking for a merger partner ? I would have thought that that train had left the station by now. I think they have reconciled themselves to remaining independent. United is now a somewhat better managed outfit, and their desire for a fleet replacement shows some modest vision. The key will be in the finance, and that may not be readily available for some time, but investors' money will have to go somewhere eventually, apart from US Treasuries.

[J]

An editorial I read a few days ago concluded that moving to acquire new aircraft was tacit acknowledgement by UAL that a merger in the near future was unlikely. Replacement aircraft are certainly needed but reduce the likelihood their (future) fleet fits the needs of a future merged airline.

[flyboy2548m]

Do you still think they're looking for a merger partner ?

I think they're all but dead meat without one, whether they're actually looking for one or not is immaterial.

[David Hilditch]

Do you still think they're looking for a merger partner ?

I think they're all but dead meat without one, whether they're actually looking for one or not is immaterial.

In what way are they dead meat ? I think the fact that the airline is now requesting the manufacturers for deals indicates that they see that the worst of the current recession is over, or at least that it will not now get any worse. They are betting that prices for new aircraft in the future will rise as the economy recovers and are identifying a good competitive position for themselves. United shareholders could stand to benefit significantly in coming years.

[flyboy2548m]

In what way are they dead meat ?

You know how a filet mignon is dead meet in a good way? Well, UAL is no filet mignon.

[J]

Direct from a Holland, MI radio station's website:

Exclusive: United Airlines in talks to buy wide-body jets - sources
Tuesday May 8

PARIS/NEW YORK (Reuters) - United Airlines is in talks with planemakers Airbus and Boeing Co over the purchase of wide-body, long-haul passenger jets to replace a fleet of 50 Boeing 767 aircraft, people familiar with the discussions said on Tuesday.

Europe's Airbus is expected to offer its upgraded A330neo jet against Boeing's 787 Dreamliner in a deal potentially worth some $14 billion at list prices, the two sources said. All three companies declined to comment on the nature of the talks.

A win in the jet production contest would be especially important for Airbus, whose struggling A330neo program has lost a number of recent bids to U.S. rival Boeing for wide-body, long-haul aircraft.

Hawaiian Airlines in March chose Boeing to supply 10 new 787-9 aircraft, dropping an earlier order of the A330neo.

The European planemaker was again bested last month when American Airlines, the world's largest carrier, chose Boeing to supply 47 new 787 Dreamliner jets.

The fate of an order for 28 A330neos from IranAir is also in jeopardy, on concerns over a Tuesday decision by U.S. President Donald Trump to withdraw the United States from an international nuclear deal.

Airbus Americas Chairman Jeff Knittel said Airbus remained confident in the A330neo despite recent setbacks.

"This is a marathon, not a sprint," he told Reuters.

"We are talking to a number of people as potential customers. We think the airplane makes sense and we are optimistic."

He declined to say whether United was among the airlines with which Airbus is involved in discussions.

The Chicago-based carrier's fleet already includes Boeing 787s, and the carrier has firm commitments for an additional 14 jets scheduled for delivery through 2027.

It does not fly the A330 family, the latest version of which - the A330neo - is due to enter service this summer.


http://whtc.com/news/articles/2018/may/ ... s-sources/