United deferred its first four A350’s

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About three years ago, United Airlines ordered 35 new Airbus A350 jetliners. The Airbus A350 is Airbus’ response to Boeing’s 787 Dreamliner, likewise with larger windows, and a quieter and more humid cabin, decreasing the jet lag most experience in long-haul flights. However, several weeks back United deferred its first four A350-1000’s. The delivery date of the first aircraft is now 2019, compared to 2018. Consider that many things have changed in United in the last three years, especially in the upper management personnel. Back when this order was placed, Jeff Smisek was still at the helm of United; so as with everything else that Smisek touched, changes were expected in this order.

What remains unclear, though, is whether the deferral signals not just a date adjustment, but perhaps a complete overhaul of the order, including a different aircraft type. Talking about the A350-1000 order, United’s Chief Financial Officer, Andrew Levy, said back in February that this was ‘an order we’re paying a lot of attention to and considering different alternatives’. No wonder they’re paying a lot of attention to it – that’s over 12 billion dollars! But the last word in his statement is quite telling: ‘alternatives’. From this comment my initial reaction is that United will indeed agree with Airbus to modify this order, including the aircraft ordered. This late in the game, I doubt that United can back out, so modifying the order is the way to go if United’s strategy has shifted from the A350. So if this holds true, what aircraft would that be?

 

 

For one, I’m happy that either way United will have some new Airbus aircraft. I prefer Airbus planes versus Boeing – they tend to be more comfortable in my opinion. A Bloomberg report from before this four aircraft deferral may give some insight as to what United might be planning behind the scenes.

United is weighing the conversion of Airbus A350-1000s as it looks to replace its fleet of 747 jumbo jets. The carrier could switch to a smaller version of the aircraft, or even the mid-sized A330. That would dent Airbus’s order book, since United is the second-largest customer for the -1000 variant, which took its first flight last week.

 

A mid-sized A330? What? So going from a newest generation aircraft to a previous generation jet? No way… But the more I think about it, the more it actually makes sense when taking United’s other moves as context. Although there were some delays, United has been replacing their 747 planes already with the new 777-300ER’s that come with the new Polaris business class seat and the delays seem to be over, at least for the time being. Additionally, United ordered 100 737 MAX 10 aircraft recently, actually adding four more 777-300ER orders at the same time. Add to this, that United is still to receive almost twenty 787 Dreamliners from Boeing. When I look at this scenario, the A330 doesn’t seem like a bad idea. United lseems to be set for short haul and long haul (which would be the market for the A350) by the jet orders just mentioned.

The United 767 fleet, however, is aging quickly, as well as the versatile 757 fleet. Both are great but with competitors taking delivery of newer generation aircraft, United once again will fall behind. My guess is this A350-1000 order is the solution to the mid-range question mark that United faces in coming years. United may continue to bide their time which may in turn open up more possibilities. There are two enhanced versions of the A330, which may be a good replacement for long-haul 767 routes. Then again, United has begun retrofitting some 767 aircraft with the Polaris seat. Let’s see how many 767’s are retrofitted and that may give us a better idea of what the plans are.

I hope United still keeps some of those A350-1000’s in the order. I’m still yet to fly an A350, but they definitely have the best looks around. We’ll keep watching United’s moves with most interest.

Give me your thoughts