Retiring? United’s premium Boeing 757s, some 767s going to ‘long-term storage’

May 11, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

United Airlines stands apart from is U.S. peers as not having officially retired any aircraft types from its mainline fleet even as the carrier’s management offer some of the most frank assessments of the impact of the coronavirus pandemic on its business.

The Chicago-based carrier has parked some 450 mainline and 300 United Express jets, United senior vice-president of airport and network operations Jon Roitman told staff Monday in an internal newsletter viewed by TPG. That amounts to just over half of its combined fleet 1,407 aircraft.

Among the planes parked are 11 Boeing 757-200s in United’s “premium” transcontinental service configuration and 16 Boeing 767-400ERs. The jets are now in “long-term storage” pending a decision on what aircraft will be retired, airline spokesperson Rachael Rivas told TPG.

The premium 757s, with 28 lie-flat business-class seats out of 142 seats total, are known by frequent flyers for being some of the friendliest for upgrades in United’s fleet. The layout was previously known as “premium service,” or PS, a brand that United retired in 2017.

Get Coronavirus travel updates. Stay on top of industry impacts, flight cancellations, and more.

United Airlines planes parked at Denver airport. (Image courtesy of Denver International Airport)
United has parked 450 mainline jets, here planes are stored at Denver Airport. (Image courtesy of Denver International Airport)

 

While the 27 757s and 767s may yet come back, the likelihood that they may have flown their last flights in United’s colors is high considering the heavy toll COVID-19 is taking on the industry. U.S. carriers are burning as much as $10 billion a month with the average number of passengers on flights around 23 people during the week ending May 5, according to trade group Airlines for America (A4A).

United has shied away from officially “retiring” any aircraft to date in the crisis. Executives argue that they want a better sense of what the recovery will look like before making permanent decisions.

“Until we see what’s needed to run the operation, we’re not going to make any firm decisions on those,” United’s chief financial officer Gerry Laderman said in response to questions on aircraft retirements during an earnings call on May 1.

By comparison, American Airlines has retired or put in multi-year storage five mainline aircraft — Airbus A330s, 757s, 767s and Embraer E190s — and Delta Air Lines will retire its McDonnell Douglas MD-88 and MD-90s in June.

Related: American won’t fly an Airbus A330 again for at least two years

Every U.S. carrier is preparing to be smaller at year-end than they were last December. The question on every management team’s mind is by how much.

United has modeled a worst case scenario of near-zero passenger demand through the end of the year. Such a scenario could see the 90% capacity cuts in May and June likely extended for some months to come.

“We aren’t projecting that and certainly hope it’s better than that, but we are planning for the possibility,” incoming United CEO Scott Kirby said abou the scenario during the call.

Anything close to “zero” demand would mean United needs far fewer aircraft. Kirby has previously said that the 757s and 767s will be retired first, as well as many of the carrier’s single-class 50-seat regional jets. The latter does not include the Bombardier CRJ550s that debuted last year and feature a first-class cabin.

Related: United considers retiring Boeing 757s and 767s, many of its 50-seat jets

United Airlines Boeing 767-400 ER Extended Range with 2x CF6-80 engines aircraft landing at Amsterdam Schiphol International Airport AMS EHAM in The Netherlands, the Dutch capital. The airplane has registration N66057 and its type is exactly Boeing 767-424(ER) . UAL / UA is a major American airline headquartered in Chicago, Illinois connects Amsterdam with ChicagoO'Hare, Houston Intercontinental, Newark, Washington Dulles and seasonal to San Francisco (Photo by Nicolas Economou/NurPhoto via Getty Images)
A United 767-400 landing at Amsterdam Schiphol. (Photo by Nicolas Economou/NurPhoto via Getty Images)

 

The long-term storage of United’s premium 757-200s leaves it with just internationally-configured jets for the foreseeable future. Its international 757-200s have 16 lie-flat business class seats — 12 fewer than the premium 757s — and 153 economy seats. These 757s, as well as United’s 757-300s, remain in its fleet.

Prior to the crisis, United planned to introduce a Boeing 737 MAX 10 with a lie-flat premium domestic product. It is unclear if those plans have changed, and unknown when its first MAX 10 will arrive.

The 767-400ERs were a workhorse for United on flights to Europe and South America. The planes had 39 lie-flat business class seats, 70 Economy Plus seats, and 131 economy seats.

In addition, United senior vice president of flight operations Bryan Quigley told pilots in a May 2 memo that the carrier only planned to schedule the 767-300ER for the “foreseeable future.”

Related: United sees Boeing 787 as new long-haul ‘workhorse,’ orders 7 more Dreamliners

United will take delivery of eight Boeing 787-9s, its new wide-body “workhorse” as Quigley put it, by year-end. The jets could replace the 767-400s as they seat just 17 more passengers.

While United can wait, it will have to retire jets at some point. In April, analysts at Cowen estimated that the airline industry may need to remove as many as 1,259 aircraft if demand is down 30% by year-end. That equals a roughly 238 aircraft reduction in United’s mainline fleet.

And even in the seemingly unlikely scenario that travel demand ends up somewhere between pre-COVID levels and Cowen’s estimate, United would still need to remove another 100 jets on top of the 27 757 and 767s already in long-term storage.

“Hope is not a strategy,” Kirby said during the earnings call. “Nobody knows when this will end and life will begin to return to normal… We plan to continue to react nimbly as the situation evolves and won’t hesitate to make hard decisions.”

Related: United may change route map post-coronavirus, says no hub is ‘sacred’

Featured image by FG/Bauer-Griffin/GC Images.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.