Boeing, Airbus Both Being Considered

United Airlines will negotiate with Boeing and Airbus for an aircraft order that one industry insider said may call for 150 planes. Both companies were asked this week to submit bids. UAL Corp., United's parent company, said it may place an order by the end of the year. According to a report in Bloomberg News, the order could replace as many as 111 of United's' widebody planes, as well as 97 of its 757 narrowbodies.

The last order United placed was for two Airbus A319's in 2001. It has an overall jet fleet of 396 aircraft.

United hopes a reduced number of orders from other airlines will help it negotiate a lower price no matter which company wins the bidding. “Our timing is opportune, as this is a competitive environment for manufacturers,” United CEO Glen Tilton said, adding that deliveries would extend “well into the future.”

The order could total $20 billion, depending on the mix of large and smaller planes. But even if all 150 were smaller aircraft, Bloomberg calculates the order at $13 billion.  “If you want good prices, this is the time to buy,” said Chris Tarry, an independent airline analyst based in London. “It’s been ages since they ordered any planes. If you’re going to buy 150 planes, then you’re going to get a very good price, particularly for near-term deliveries.”

The average United airplane is 13 years old, according to the company website. That compares to an industry average of 11 years. Analysts say airlines often get good prices on planes by negotiating with both Boeing and Airbus, but buying from only one company,and offering up such a huge order in the depths of a recession will result in some aggressive and competitive bidding.

FMI: www.united.com