What Is United Continental's New Fleet Plan?
United Continental Airlines, along with all other airlines, has benefited hugely from the low oil prices . Consequently, the low cost environment has enabled the carrier to refurbish, upgauge, and add more capacity to its fleet. While refurbishing helps the company provide its clients with a more convenient and comfortable flying experience, fleet replacement reduces its expenditure on depreciation and help saves fuel costs.
As a part of its 2016 fleet plan, United's fleet size will shrink by a net of 7, as it takes delivery of 21 mainline aircraft and retires more than 28 regional aircraft. We can expect the company's fleet to stand at 736 mainline aircraft and 493 regional aircraft by the end of 2016.
A substantial part of United's fleet consists of Airbus aircraft, A319s and A320s. However, these are about 17 years old, on average. In fact, United's youngest Airbus planes were built in 2002. To get a perspective, its is inadvisable to run an aircraft beyond 23-25 years of age, as in such a case the cost of maintenance is more than that of buying/leasing a new plane.
While United Continental had planned to replace the bulk of its Airbus fleet between 2016 and 2020, in a scenario of low oil prices it deferred its plans as it made economical sense to keep flying older planes. By upgrading its A319s and A320s with larger overhead bins, slimline seats, satellite Wi-Fi, and streaming video, United has been able to keep these aircraft in service longer. However, the Airbus fleet, along with Boeing's 757s and 737s will need replacing within the next few years. Consequently, United Airlines will probably need at least 300 new narrowbodies between now and the late 2020s. To this end, the carrier has ordered as many as 100 737 MAX 9 planes and 65 737-700s, scheduled for delivery in 2017. Further, it would not be too much of a stretch to expect the order of additional Boeing airplanes and retirement of Airbus fleet to result in a simplified and standardized fleet of only Boeing airplanes in the future. This would not only be a huge win for the aircraft manufacturer, Boeing, but also United, as a single fleet strategy, as seen in the case of Southwest, allows a carrier to curtail its post sale costs by reducing the amount spent on servicing and maintenance.
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1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email email@example.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for United Continental
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