United outlines cash outlay for Airbus and Boeing orders

Washington DC
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United Airlines says the total cash outlay for its combined order it placed today with Boeing and Airbus will be $60 million during the next three years.

The carrier has divided its widebody order evenly between the A350-900 and the 787, ordering 25 of each type. Deliveries are scheduled to begin in 2016 and continue through 2019.

"We have also secured deferral rights that provide us with further financial flexibility," the carrier says. "We have also secured considerable backstop financing from both manufacturers, which will protect us in the event of tight credit markets as the new aircraft are delivered."

Describing the rationale for placing orders with both rival manufacturers United says that neither airframer offers next-generation aircraft sized to optimally serve its current and future markets.

United says the mix of A350s and 787s offer the right range of aircraft sizes needed to replace its 747s and 767s. The A350s have 11% more range than the carrier's current Boeing 747s, while Boeing 787s have roughly 32% greater range than 767s.

The new aircraft also allow United to downgauge its widebody fleet, reducing average seat count for the 50 aircraft by 19%, and resulting in a system-wide international fleet count reduction of 10%.

"This reduction is largely the result of the retirement of our Boeing 747 aircraft," the carrier says.

Only one engine is available for the A350, the Rolls-Royce Trent XWB, while GE offers the GEnx and Rolls-Royce supplies the Trent 1000 for the 787. United has not indicated an engine selection for its 787s.

Today's order was the first United has placed in more than ten years.