United Airlines has announced it has converted an order for sixty-five B737-700s into four B737-800s and sixty-one B737 MAX 8s.
In a statement, United said deliveries of the -800s are scheduled for the second half of 2017 while those of the MAX jets have yet to be determined. It said the changes will allow it to take advantage of the MAX’s improved fuel efficiency while also reducing capital expenditures by approximately USD1.6 billion through 2018.
In addition, the company has agreed to purchase twenty-four EMB-175s from Embraer, instead of leasing the aircraft from a Capacity Purchase Agreement (CPA). The order represents the transfer of an existing order previously placed with Republic Airlines parent holding company, which will now be cancelled.
The plan is now to lease the aircraft to third party carrier operating as United Express.
“The realignment of our order book shifts our focus to ensuring our capital investments support earnings growth. We will continue to look at profitable opportunities in the new and used aircraft market to generate the highest ROIC,” Andrew Levy, executive vice president and Chief Financial Officer, said.
The airline is also considering introducing more second-hand jets to its fleet beyond the eleven A319s being delivered this and next year.
United also says that now it plans to retire all of its twenty remaining B747-400s by 3Q2018