When it comes to the next generation of its fleet, size matters for United Airlines. The carrier added to its new jet backlog this week, with 50 more Boeing 787s and 60 more Airbus A321neos set to fly between 2028-2031, focusing on larger planes to increase capacity for both domestic and international operations.
I’m convinced our strategy is the right one as we continue to add new, larger aircraft to take full advantage of our growing flying opportunities both internationally and domestically.
– Scott Kirby, United Airlines’ CEO
United cites a goal of increasing gauge as key to its growth plans. Replacing older, smaller A320ceo and 737NG family aircraft with the larger A321neo delivers on that for the company’s domestic fleet. United’s A321neo layout can carry 200 passengers, including 20 first class and 57 Economy Plus extra legroom seats on board. This is a dramatic increase from the prior generation of planes.
Read More: United bets big on premium traffic rebound with 270 plane order
This shift in gauge is not new for United. When it announced the first tranche of this single-aisle aircraft refresh in June 2021 the same idea was floated. At that time United’s EVP/CCO Andrew Nocella described the impact of the fleet transition:
About one third of our domestic departures are on 50-seat regional jets. Those aircrafts have no first class cabin and no economy plus seats, either. So as we retire 200 of those aircraft and let’s say they’re all one for one replaced by a MAX 8 or MAX 10 or an A321neo, those aircraft generally come with 16-20 first class seats, up from zero. And they come with 50-60 economy plus seats up from zero. So when you do all that math the average size of the United North American flight goes up by 30 seats or 30%, but the average size of the number of premium seats we’re flying per departure actually goes up by 75%. It is a staggering change.
Similarly significant will be the impact on the long-haul fleet as more 787s continue to fill United’s long-haul operations. Today the carrier operates approximately 50 767s across the globe. The 787-9 comes with 10-20% more seats on board. It is not as sizable a jump as the 30% increase across the domestic fleet, but the impact will be felt in the carrier’s long-haul route planning.
The newer planes are more fuel efficient and should deliver a solid cost profile for the airline, but only if it can effectively fill the seats. Fortunately, demand appears to be back on a steady growth track, at least for the time being.
Less clear at this point is what United will do to increase (or even maintain) gauge against its largest aircraft flying today. The company’s 777-200ERs can mostly be replaced like-for-like with a 787-10. But the 777-300ERs currently have no direct replacement in line. Fortunately that fleet is relatively younger, averaging around six years old today. Replacements can be sorted a decade hence without too much risk.
Few viable alternatives
United’s focus on gauge is driven largely by the limited number of flights it can add at many of its hubs. Growth at Newark, for example, is now only possible through flying larger planes, not adding more departures. This means more opportunity in larger markets for United, but also challenges as it needs flights to smaller cities to deliver the connectivity of a network airline. Some cities can support a 50 or 70 seat jet today but won’t have the demand to fill the larger mainline jets at the end of the decade. Losing one or two of those does not kill a network. But losing too many can start to affect the viability of the larger planes, too. It is a delicate balancing act for the airline, but one it must pursue given the inability to add more flights or gates.
United is, of course, not the only airline to face this challenge. Smaller cities have seen service cuts as regional jet capacity is slashed across the US. But United is leading the US market in gauge growth over the past four years, up 20% to 133 seats/departure in Q3 2023 per Cirium data.
This trend is expected to continue, as the bulk of new aircraft orders for US airlines continue to shift towards the largest options available from suppliers. Allegiant recently indicated it will take more MAX 8200s than MAX 7s, in part owing to certification challenges of the latter. Southwest similarly is taking more MAX 8s in place of originally planned MAX 7s. Spirit converted its A319neo order to the A321neo.
Size matters. A lot. And United has now effectively secured its ability to realize its planned growth for the next decade.
Note: The A321neo order, now at 130 frames, is separate from the A321XLR order (50 aircraft) to mostly replace the 757s which fly with a premium cabin for long-haul service.
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Yossarian says
UA might backfill the 50 seat Regionals with E175’s, but they are capped at 255 70 seat Regionals. Unless the new pilots contract expanded that.
Seth Miller says
Yes, the 70-seat fleet is capped and unlikely to expand anytime soon. But it is also not a 1:1 replacement cycle. Basically everything moves up a notch. Or, in the case of some markets where only 50 seats works, they get dropped.
United also (theoretically) has the advantage of the CRJ550 to offer a premium experience in 50-seat planes and generate higher revenues than the all-economy options deliver.
But, generally, everything is getting larger and there’s no other option for growth given lack of gates/slots in the key hubs.