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ASCM Insights

Record-Setting United Airlines’ Aircraft Purchases Signal Upturn in Travel

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United Airlines is currently in the process of modernizing its fleet with its largest-ever aircraft purchase. The Chicago-based carrier ordered 200 Boeing 737 Max jets and 70 Airbus A321neo aircraft, for a grand total of $35 billion. The airline is also buying 100 ES-19 electric planes from Swedish startup Heart Aerospace to support shorter routes. CNN Business reports that United is paying far below half of the 737 Max’s list price because of its previous electrical problems. The order includes 150 of the newest version of the 737 Max, the Max 10, which is in testing and not yet certified to fly passengers.

These investments mark the industry’s largest aircraft purchase in about a decade and signify that United believes air travel is truly bouncing back. “They're getting a good deal,” Ron Epstein, aerospace analyst for Bank of America, told CNN Business. “But if they didn’t feel reasonably good about the return of market for flying, they wouldn’t be doing it.”

About 200 of the planes will replace United’s smaller 50-passenger regional jets. Another 100 will be used to replace older full-size planes. The electric planes will be used for urban or commuter trips of up to 250 miles, which is all the plane batteries can accommodate. In the past, some of these routes were eliminated by carriers for being too expensive, Reuters reports. In addition, the zero-emissions planes will be an important stepping-stone for the airline as it works toward its goal of reducing its greenhouse gas emissions 100% by 2050.

In February, United made an investment in electric aircraft startup Archer and purchased $1 billion worth of aircraft, with an option to purchase an additional $500 million. The company is also partnering with Phoenix-based regional carrier Mesa Airlines to buy 200 Archer eVTOL planes and possibly 100 more Heart Aerospace ES-19s. Including these and previous orders, United is on tap to obtain 500 new jets.

The company is also calling its laid-off employees back to work and plans to add 25,000 frontline jobs — including pilots, flight attendants, mechanics, and gate agents — over the next five years.

Now arriving in San Antonio

United leaders expect to post an adjusted pre-tax profit this month, which would mark the first sign of profitability for any major airline since COVID-19. Indeed, leisure travel is almost back to normal, and many industry experts are predicting record international travel next year.

Here at ASCM, we’re very excited about the travel rebound, and we can’t wait to greet you at the ASCM CONNECT Annual Conference. Our 2021 event will take place October 24-26 in San Antonio and include more than 50 instructive and inspiring educational sessions. The speaker lineup features supply chain leaders from Bristol Myers-Squibb, Clorox, Coca-Cola Beverages Africa, Dell, DHL, Gartner, GE Appliances, Sysco, UN Global Compact and many more. We’ll also be offering exclusive in-person features, including Connection Cafés for enhanced discussion and networking, as well as Innovation Labs that showcase cutting-edge technology from companies including o9 Solutions, Coupa and Deloitte.

This year’s event is hybrid, so if a flight isn’t in your future, register for our innovative virtual experience. You’ll have access to more than 40 educational sessions, including numerous presentations live-streamed from San Antonio.

Registration for both events is open now with great early-bird rates. Whether you’re joining us in San Antonio or online, we can’t wait to connect.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer at ASCM, the largest nonprofit association for supply chain and the global leader in supply chain organizational transformation and innovation. Prior to this, he was the managing director for the Operations Consulting Group of American Express Tax and Business Services. His leadership roles have included project management, business process redesign, and individual and organizational alignment. Eshkenazi may be contacted through editorial@ascm.org.

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