United's Widebody Order
The first real post!
Where to begin? There’s so much I could talk about from this past week, but one thing which got my attention in particular was United Airlines’ orders for both the Boeing 787 and the Airbus A350.
This one kind of caught me by surprise, mainly because I heard about the order on the radio driving to work that day, not my usual source of aviation news! At first I thought this was kind of an odd choice, splitting the order between the two manufacturers. No other US airline has done this (AA, CO, NW went for only 787s, US went for only A350s). However, when you look beyond the US, ordering both aircraft isn’t quite as uncommon as I first thought. Eight carriers (including some established names) have ordered both types - see the chart below. (Warning, I got my numbers from Wikipedia, and didn’t have a chance to verify them, so apologies in advance if there are any errors.)
Looking at the chart, I have a few observations, which again had not really struck me before:
--- The orders are always for different sized aircraft (i.e. no airline has ordered both the 787-9 and A350-800), which seems sensible enough obviously.
--- With the exception of Qatar Airways, the balance between the total A350 and total 787 orders has been virtually identical for each airline.
--- There is no real favourite in the most popular combination of 787 and A350 sizes, though the 787-8 and A350-900 combo (like United’s order) is more common. Only two of the airlines ordering any A350s also ordered the 787-9, with the majority ordering the -8, which has no A350 equivalent. (Did that make sense?)
--- Five of the carriers ordered capacity combinations that could not have been met by only the 787 family or the A350 family (i.e. ordered both the smaller 787-8 and the larger A350-900 or -1000). To me, this seems like the obvious reason to go for both types, but I wonder if this is a cause or effect of going for both types. I don't recall the specifics from the time, but I wonder what motivations were behind the other three carriers (Singapore, Etihad and Avianca) decisions to split their orders with no real advanatges from increased capacity options (not yet at least).
But maybe I'm just falling into the trap of using statistics to prove anything; after all, only a 1/3 of A350 customers have also ordered the 787, and only a 1/7 of 787 customers have also order the A350.
So let's just get back to the United order.
United have said that the plan is to reduce the current widebody fleet of three types (747, 767, 777) to these two new types only. So I guess that means United will be abandoning the high capacity market with no prospect of any A380s or 747-8s. That's another blow to the VLA programs, with one less potential customer to sell to, but I'm not really surprised. But in general, this move makes sense to me; United stated that this fleet renewal would reduce their long-haul seat count by 19%; this is a similar scale to their short-haul capacity reduction when they retired the 737s earlier this year. By getting smaller (on average) widebody aircraft, United can safely reduce capacity and cost without affecting flight frequency, which seems like a very smart move. And in the long-haul business, frequency can be particularly important, because one aircraft can affect your daily frequency by 50% or 100% between city pairs, which could easily influence overall passenger demand. Ultimately, United is reducing capacity but maintaining (even growing) it’s international network, which is what the passenger cares about most.
It also says that United is committed to focusing on capacity control and high load factors, and are sensibly taking actions to avoid the over capacity conditions of the US airlines of the late 90’s, which ultimately sent United and others into bankruptcy when the demand for travel collapsed.
Up until now, I thought United were kind of past it, a dinosaur of the old airline world. Even after their order announcement, I thought United's so cash strapped that they've split the order just to get better financing; and don't get me wrong, I'm sure the financial deals from Airbus and Boeing were very attractive. But after reconsidering this order a bit more, I really think that United is on the right track. They have a very clear vision going forward for their long-haul plans. The A350/787 fleet solution is simple and flexible, and their 50 options on each model leaves the door open for future 787-9s and A350-1000s, giving United even more flexibility for little added complexity. I wonder if many more airlines may take this split order approach going forward, as both development programs progress.
Orion