United Airlines bets €13bn on return of luxury flying

United Airlines has spent big on targeting luxury fliers with its latest plane order, which ranks as its largest ever.

US carrier United Airlines is overhauling its fleet with the biggest jetliner order in company history and an ambitious upgrade for its aircraft cabins, bolstering a push to appeal to more travellers willing to pay for pampering.

The airline has agreed to buy 200 Boeing 737-Max jets and 70 Airbus SE A321neo planes, a deal valued at about $15bn (€12.6bn).

Those planes and other United single-aisle jets will get a revamped cabin with seat-back screens and larger overhead bins.

The plans signal the airline’s intention to step up competition with US rivals Delta Air Lines and American Airlines for premium-seat customers, who demand more creature comforts and typically generate an outsize portion of industry profits.

United will also use the new planes to reduce its use of smaller regional jets amid an anticipated rebound in corporate demand, which is still stuck at less than half the pre-pandemic level.

“We’re deadly serious, at United Airlines, about getting people to fly United,” chief executive Scott Kirby said.

“The bet we’re making today is not about business travel returning — business travel is going to return. The bet we’re making today is that customers care about the product."

The order includes 50 of Boeing’s best-selling plane, the Max 8, along with 150 of the larger Max 10 jets. 

The purchase boosts United’s Max order book to 380, including 30 aircraft that have been delivered. 

Boeing’s workhorse jet is in the midst of a comeback from a 20-month grounding that was prompted by two deadly crashes.

By 2026, the larger-plane strategy will boost United’s seats for each departure by 30% compared with 2019 levels. 

The gain will be about 75% for premium berths per North American departure. 

The increased seat count in United’s new fleet will lead to an 8% drop in costs for each seat flown a mile, Mr Kirby said.

The move towards larger domestic aircraft and a refreshed cabin mimics a strategy set several years ago by Delta, which minimised its reliance on regional jets and shifted many routes to bigger planes with more premium seats.

United’s decision to put screens at each seat also echoes Delta’s approach, while American contends that most passengers prefer to stream entertainment on their own devices.

“We’re going to compete against all product types out there,” United’s chief commercial officer Andrew Nocella said.

Bloomberg