Airlines

United Airlines buys 25 additional Boeing 737 Max jets in vote of confidence in the planes

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Key Points
  • United Airlines' Boeing 737 Max order is a vote of confidence in the planes that were grounded for 20 months after two crashes.
  • United said it's buying 25 additional Max planes and moving up orders for others.
  • The FAA lifted its ban on the planes in November after Boeing made software and other changes to the jetliners.
A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport.
Justin Sullivan | Getty Images

United Airlines is buying 25 additional Boeing 737 Max planes and taking delivery of other orders earlier than previously planned as it prepares for a recovery in travel demand, the carrier said Monday.

"As we plan for the future and the return of demand, we've been looking at ways to best position our fleet for the recovery and be in a position to best take advantage of people's desire to travel," Andrew Nocella, United's chief commercial officer, said in a note to staff.

In addition to the 25 Boeing 737 Max planes that are slated for delivery in 2023, the Chicago-based airline said it moved up the delivery of 40 other Max jets to 2022 and five others to 2023. In total, United has firm commitments for 188 Maxes, according to a securities filing Monday.

The vote of confidence in the jetliner comes just months after the Federal Aviation Administration lifted its ban on the planes following two deadly crashes. United, which had 14 Boeing Max 9 jets in its fleet at the time of the March 2019 grounding, started receiving the planes from Boeing again in December, the first carrier to do so. It started commercial flights with those jets last month.

United lost more than $7 billion last year as it struggled, like other airlines, in the Covid-19 pandemic. Travel demand is expected to remain weak in the first half of the year. United said in the filing that it expects its first-quarter capacity to be down at least 51% compared with the same quarter of 2019.

But the airline is now preparing for a recovery with vaccine distribution picking up.

"And as the end of the pandemic nears and vaccines continue to roll out, today's fleet announcement helps position us to meet the demand we expect to see in 2022 and 2023 and puts us on a path toward more opportunities for our employees in the future," wrote Nocella.

Boeing shares rose 5.8% on Monday to close at $224.39, while United's gained 1.2% to end at $53.31 during a broad stock-market rally.

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