Going behind United’s February 29 10K filing

The recently filed 10K attracted attention because of the MAX 10 delay and interest in securing A321neos to fill the airline's fleet plan gap. Here's the key table from the document. [caption id="attachment_81771" align="aligncenter" width="580"] United Airlines 10K[/caption] The table shows the airline planned on taking 80 MAX 10s this year. That is a significant number of aircraft, roughly one every five days. The absence of this aircraft severely impacts United's fleet planning. United, no doubt, is exploring other remedies against Boeing. We suggested some ideas about this based on Boeing's contractual language. Looking at United's fleet starting October 2020 (when we began tracking this data), we see the following through February 2024. [caption id="attachment_81777" align="aligncenter" width="576"] AirInsight; FlightRadar24[/caption] United's single-aisle fleet has grown, while its regional fleet has declined. Widebody growth has been relatively slow. The intriguing aspect of United's fleet is looking at its filing and noticing that the A319 and A320 are aging rapidly. They are headed for retirement. United cannot retire this fleet without a replacement lift. MAX 8s would likely replace these aircraft. That would be somewhat overkill using an MAX 8 replacing an A319. As the chart illustrates, United has steadily been reducing its Airbus fleet. But looks to change going forward. Boeing's MAX production rate is stuck at 38, and United needs to find a solution for the 80 MAX 10s planned for 2024. United planned for 43 MAX 8s this year, too. [caption id="attachment_81778" align="aligncenter" width="580"] AirInsight; FlightRadar24[/caption] Talk about all your eggs in one basket. It can't get MAXs fast enough, it can't get the MAXs it needs most, and it can't retire the expensive Airbus models it has. United is in a world of fleet hurt here. Look at the chart below that shows data for United - the fuel burn on the A319 and A320 are the highest, along with the 737-700. United will want to replace these mols ASAP. The size of the circles represents the number of flights. These three gas guzzlers carry a significant amount of traffic. [caption id="attachment_81779" align="aligncenter" width="580"] AirInsight; T-2[/caption] Notice also the vast improvement in fuel burn for the MAXs. The improvement is an order of magnitude. Of course, United is fuming they can't get their deliveries! The cost impact is enormous. And fuel costs are not coming down—notice also the green horizontal line at 100. That line reflects the baseline for the MAX and NEO, which operate above the line. Other MAX 9 operators, like Alaska, are routinely well above the 100 line. Here's another way of looking at fuel burn for United's single-aisle fleet. [caption id="attachment_81780" align="aligncenter" width="580"] AirInsight; T-2[/caption] United's fleet planning has gone off the rails, and they can do nothing about it. The hunt for A321neos is earnest and comes with top-dollar pricing. Airbus will help United, but there will be a quid pro quo - hint: those A350s are on order.

No results