United Airlines had placed an order for 270 Boeing and Airbus planes worth over $30Bn on Tuesday. As per its chief executive Scott Kirby, the motive behind such a big purchase is to take advantage of the travel boom post-pandemic.
It is the highest aircraft order by United Airlines to date since its entry into the business world. For nearly 18 months, the travel industry has been going through a bad time following the onset of the Coronavirus pandemic.
Now, the covid situation is slowly coming under control. Hence, different nations are relaxing travel restrictions from other countries. And the travel industry is likely to see a boom post-pandemic.
To take advantage of a travel boom, United Airlines had ordered bigger jets to replace the smaller ones. United Airlines is planning to replace Boeing 737 Max planes with smaller jets during 2022-26.
Move Likely to Boost the US Economy
After the completion of the buying process, United Airlines will have bigger planes. Hence, it will sell more premium seats in first-class or extra legroom to gain a bigger profit via travel on a domestic route.
Like other airlines, United Airlines also went through a bad time due to a heavy loss during coronavirus-related lockdowns. And it even had to lay off its 36,000 staff members due to its inability to pay them salaries.
Mr. Scott Kirby has said that this move will help revive the US economy on a large scale. Besides, it will give an impetus to the growth of United Airlines.
In his view, the new aircraft will help in job creation, rise in traveler spending, and the fast shipping of goods & services. The airline expected July to be its first profitable month on a pre-tax basis since January.
It is yet to reveal its quarterly loss during April-June. The reason for it is the slow return of business and international travel. Besides, it plans to build up domestic hubs across airports in Chicago, Denver, and Houston.
Airlines Must Eye Long-Term Competition
Airlines need to make long-term bets to beat the competition in the airline industry. Currently, the domestic market is coming back to its track at a fast speed. Moreover, low-interest rates in the current phase also make every purchase feasible.
Boeing Commercial Airplanes CEO & President Stan Deal has responded positively on this subject. He has lauded United Airlines for showing its confidence in Boeing’s airplanes. He believes it will strengthen the relations between United Airlines and Boeing to a great extent.