United Hunts for Used Wide-Body Jets as Glut Leads to Bargainsby
CFO says airline is looking for deals as it overhauls fleet
No decision yet on $12.4 billion order of Airbus A350 planes
United Continental Holdings Inc. is stepping up its hunt for used long-haul jetliners, as a glut of the largest passenger planes creates what the airline’s finance chief calls “tremendous opportunities.”
Older aircraft often have similar technology as a newer one while offering lower ownership costs, Chief Financial Officer Andrew Levy told analysts and investors Tuesday. That creates an “extremely powerful” economic case for buying used, he said at the Stifel Transportation & Logistics Conference.
“We are actively looking around at used aircraft opportunities, and we’re hopeful that’ll be a big part of our fleet plan as we move forward,” he said. “We can’t be buying airplanes on a kind of onesie-twosie basis. We need to be buying big chunks of airplanes, which makes it a little tougher to accomplish.”
Levy joined United in August and has been reviewing the company’s planned jet purchases, including a $12.4 billion order for 35 of Airbus Group SE’s largest twin-engine jets, the A350-1000. No decisions have been made on that order, he said. The third-biggest U.S. airline may switch to a smaller version of the same aircraft or swap some of them for the A330, Levy said late last year.
The commercial aircraft market is awash in wide-body jets as airlines delay taking previously ordered planes. Emirates in December announced it would postpone a dozen A380 superjumbos, bringing the total number of delivery delays to their highest level since at least 2001, according to Flight Fleets Analyzer data compiled by Bloomberg Intelligence.