United Ditches the Airbus A350-1000, Gets the -900 Instead

Sep 6, 2017

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United Airlines is switching its order for the Airbus A350-1000 to the smaller A350-900, a move that had been in the air for some time after chief financial officer Andrew Levy said last year the airline wanted smaller jets for its long-haul fleet.

The A350-900 typically seats 300, while the A350-1000 in United’s Polaris / premium economy / economy configuration would have featured most likely between 330 and 350 seats. Fewer seats and lower fuel consumption compared to its bigger sibling might mean more profit for United on the same routes.

The 35 A350-1000s United ordered in 2013 now become 45 A350-900s, Airbus said in a statement on Wednesday. According to Airbus list prices the order is worth $14 billion, although for an order so large customers will almost always get a sizable discount.

The new jets will begin arriving in 2022 and deliveries will end in 2027, Levy told a conference on Thursday.

(TPG was able to take part behind the scenes in an A350 delivery recently, and had a unique seat on one of the pre-delivery test flights.)

An Airbus A350-900 taking off at the International Aerospace Exhibition (ILA) in Schoenefeld near Berlin, on June 3, 2016. Image by Wolfgang Kumm / Getty Images
An Airbus A350-900 taking off at the International Aerospace Exhibition (ILA) in Schoenefeld near Berlin, on June 3, 2016. Image by Wolfgang Kumm / Getty Images

The decision to go with the -900 means that United sees the A350 as a like-for-like replacement for the 777-200 rather than for the 747s it is retiring this year. The larger 747s will be replaced by 777-300ERs, which have roughly the same number of seats, while the Airbuses will gradually take the place of the 777-200s.

Airbus says the A350 saves 25% in fuel costs versus its competitors. During a recent conversation, LATAM Airlines’ senior vice president for the US, Asia, Canada and the Caribbean Pablo Chiozza said the airline, which operates A350-900s and 777-300ERs, sees double-digit fuel savings with the Airbus compared to the Boeing, on a per-seat basis.

But with fuel prices still relatively low, airlines are in no hurry to replace older, more fuel-thirsty airplanes, meaning that the 777-200s will keep making profits for United for at least the next 10 years.  By shifting the deliveries of the A350s from 2022 onwards, later than the original order, United also puts off the heavy capital expenditures required to buy new jets.

For the A350-1000, the biggest jet made by Airbus short of its gigantic (and troubled) A380, the United switch isn’t very good news. Out of 858 A350s ordered, only 177 are 1000s — confirming a worldwide shift towards more frequencies on smaller airplanes, rather than trying to fill bigger jets. By switching its Airbus order, United — the world’s fourth-largest airline by passengers carried — becomes the latest major carrier to join that global trend.    

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