United set to order 150 widebody planes

[FA Mikey]

United Plans to Order Up to 150 Jets: Report


United Airlines plans to order up to 150 new airliners and has asked Boeing and Airbus to propose dueling bids for the jets, a report says.

The Wall Street Journal reports the deal could be worth more than $10 billion. By staging a winner-takes-all competition between the two airplane makers, United's parent, UAL Corp. is hoping to obtain better terms than otherwise might be available, the Journal notes, citing people familiar with the situation.

United sent a formal request to Boeing and Airbus on Tuesday, the newspaper reports. United's request focuses on replacing many of its 111-airplane wide-body fleet, as well as some of its 97 older Boeing 757 narrow-body planes, these people said. United has a total fleet of 400 jetliners, according to the Journal.

full story here

 

[767jetz]

This is a hard one to read into. Based on the facts of the report, and considering the economic climate, the financial needs of the aerospace manufacturing industry, the potential for US job growth, and other airlines canceling and deferring orders, this might actually be a great opportunity and a surprisingly smart calculated move from a management team known for spectacular blunders.

However, a word of caution... There could also be underlying motivations that are not so obvious on the surface. With United entering into contract negotiations with almost every organized labor group on the property, this could be the carrot to obtain concessions with the promise of growth and advancement, only to be used as the stick when contracts are signed and orders are suddenly deferred. I can easily see a scenario unfold where promises are made to some groups in exchange for a sub-standard contract, and then those promises broken and blamed on the group that holds out for an industry leading contract. The result would once again be management's goal of driving a wedge between the employees and playing one against the other.

I will reserve judgment until more details emerge. I would advise all employees to do the same, keep this management's history well in mind, and keep your expectations real.

 

[Maark767]

This is a hard one to read into. Based on the facts of the report, and considering the economic climate, the financial needs of the aerospace manufacturing industry, the potential for US job growth, and other airlines canceling and deferring orders, this might actually be a great opportunity and a surprisingly smart calculated move from a management team known for spectacular blunders.

However, a word of caution... There could also be underlying motivations that are not so obvious on the surface. With United entering into contract negotiations with almost every organized labor group on the property, this could be the carrot to obtain concessions with the promise of growth and advancement, only to be used as the stick when contracts are signed and orders are suddenly deferred. I can easily see a scenario unfold where promises are made to some groups in exchange for a sub-standard contract, and then those promises broken and blamed on the group that holds out for an industry leading contract. The result would once again be management's goal of driving a wedge between the employees and playing one against the other.

I will reserve judgment until more details emerge. I would advise all employees to do the same, keep this management's history well in mind, and keep your expectations real.

Bingo... Our 787-9 order for up to 100 airplanes is so tied into AA achieving a cost competetive agreement with it's pilot group. I have read that statement many times in various company newsletters. So yes it's the old carrot game... The truth is they must get these airplanes no matter what...

 

[FA Mikey]

Boeing Once, Boeing Twice... Sold?

By Rich Smith

If you want to make headlines, then announcing a 150-plane contract is a darn good way to do it. It's a nice round number. It's big. Everything about it sounds important -- but the most important thing of all is that Boeing not do this deal.

First, Boeing and Airbus will be played one-against-the-other, asked to offer their best prices (natch). But the second prong of the deal is the one where the plane-makers will really need to hang their hats: debt-laden, unprofitable, and cash-burning United will demand favorable credit terms from its would-be suppliers, as well as the right to wiggle out of its orders should it need (read "any time it wants") to. -------As pointed out by 767jetz

... and why Boeing should refuse to play
Let me put this plainly: This is a bad deal. Boeing shouldn't bite. Why not? Well, mainly because it doesn't need to. Although Boeing certainly has "issues" with its order book, the company's still sitting pretty on some $350 billion in backlogged work. While another $10 billion would be nice, Boeing doesn't need it.

What's more, after the beating Boeing's profits took last year, and the critical status this have left its cash reserves in, Boeing would be crazy to cut profit margins any further, or grant loose financing terms just to land a sale it doesn't, strictly speaking, need.

full story here

 

[Hatu]

J.P. Morgan lowered its rating on UAL to underweight from neutral, saying United's proposal request for new jets actually should be regarded as a ploy to raise capital that highlights its weak cash position.

"Almost 10 years ago to the day, Boeing purchased 17 A340-300s from Singapore to help secure a 777 order," wrote analyst Jamie Baker. "While it is unlikely that manufacturers could simply advance needed cash to United in exchange for long-term commitments, we believe United itself readily expects significant 'creativity' on part of the manufacturers."

http://www.marketwatch.com/story/analyst-f...ds?siteid=yhoof

 

[gatemech]

With the economy in the toilet. American workers unemployed. I just read unemployment is at an all time high. I think UA should only look at Boeing. Parts may come from othe countries but they are assembled here. It's bad enough that the government gave Airbus the tanker contract. That is really american!!!

What is this country coming to when we give all our work to other countries????? Scary

 

[FWAAA]

With the economy in the toilet. American workers unemployed. I just read unemployment is at an all time high. I think UA should only look at Boeing. Parts may come from othe countries but they are assembled here. It's bad enough that the government gave Airbus the tanker contract. That is really american!!!

What is this country coming to when we give all our work to other countries????? Scary

I'm not an Airbus fanboi, but many Boeing aircraft contain components and subassemblies manufactured in other countries, especially the 787. And likewise with Airbus airplanes - they contain parts made in the US.

I'm a GM loyalist, but look at all the GM vehicles made in Canada and Mexico. Are they more "American" than Hondas assembled in Dublin, Ohio or Toyota Camrys built in Georgetown, Kentucky? I can't tell.

 

[HottootrotNyc]

It's so sad to see UAL in this position, having to raise cash by jerking around orders on the books. This is the reason we were told Continental walked away from UAL. There books were so bad, thought a merger would tank both companies. I really hope something big happens, America can't afford to have 80,000+ people unemployed all at once. :unsure:

 

[ZMAN777]

Whoever wrote the WSJ article certainly didn't go to great lengths to check their facts, especially regarding aircraft pricing. At listed prices for the Boeing 787-8 (see link), $10 billion would get you about 60 aircraft.....a far cry from 150. Even with a 50% discount (doubtful!!) you wouldn't reach the 150 number.

The published prices for the 737-700 would fit into that figure but that's certainly not what UAL has in mind. The total number of UAL 757's/767's is a bit shy of 150 but one could envision a scenario where this would be a likely number for replacement. If one checks the "listed" prices of Airbus's A350 it's even higher than the 787. Purchasing 150 787/350 type a/c would be more in the area of 20-25 billion.

It's interesting that the article speaks of 757 replacement as well. The 787 is much larger than the 757 and currently Boeing doesn't have a ready replacement for the 757 unless you want to go in the direction of the 737-900 (Yikes!!). Again, I don't see UAL heading in that direction.

For years UAL management has been talking of getting the fleet down to 3 types (read A320, 787/A350, 777-200/300). If Boeing unveils it's next narrow-body follow-on (purported to incorporate the same composite technology as the 787), we could see UAL and others going down that road to replace their current fleets of 757's. This design is supposed to be a wider narrow-body than the current 757/737 design and of course much more efficient. Given the current problems with the 787 roll-out don't expect to see this announced anytime soon.

Cheers,
Z


www.boeing.com

 

[casual rat]

I'm with Jetz...this is a setup. All I see is a new acronym that doesn't mean much more than preparing to request something. Generating new income, or expansion is the antithesis to these people. All they understand is shrinkage (tongue in cheek).

 

[phasersonstun2]

United Plans to Order Up to 150 Jets:


NOT!

 

[ORDmech]

I'm not an Airbus fanboi, but many Boeing aircraft contain components and subassemblies manufactured in other countries, especially the 787. And likewise with Airbus airplanes - they contain parts made in the US.

I'm a GM loyalist, but look at all the GM vehicles made in Canada and Mexico. Are they more "American" than Hondas assembled in Dublin, Ohio or Toyota Camrys built in Georgetown, Kentucky? I can't tell.

Sorry to be off topic....but at least the quality of vehicles coming out of Oshawa Ontario (Home of the Camaro) is a whole lot better than the sh*t that comes out of Mexico. They have the awards to prove it. I know I own a vehicle that came from Mexico. Its the last GM product I buy that is assembled in Mexico.

 

[Smokin Cubans]

No disrespect, but the only planes United is getting, is what ever CO happens to have.

 

[goodgirl37]

No disrespect, but the only planes United is getting, is what ever CO happens to have.

And Vice Versa, and CAL will get all of the GREAT UAL employees