United Airlines is overhauling their fleet with the largest jetliner order in company's history. It also plans to upgrade its cabins to meet increasing demand from travellers who are willing to spend more for luxury.According to estimates made by Ascend by Cirium, the deal was worth approximately US$15 billion.According to Tuesday's company statement, these planes and all United single-aisle jets will receive a new cabin with larger overhead bins and seat-back screens.United's fleet plan is key to capturing more tourists, especially those who are high-paying in coastal hubs such as San Francisco or Newark, New Jersey. Andrew Nocella is United's chief commercial officer. The Max 10 and A321neo aircrafts are the largest in their families. United will use these planes to grow in those areas, which have limited capacity, he said.Nocella stated that the company plans to expand in cities like Chicago and Denver, and to have an annual systemwide growth rate of 4% to 6.6% over the next few years.The airline announced in a broad-based growth plan that it will add more room and seatback entertainment to its aircraft, which is a departure from the previous strategy.The airline announced that it will hire approximately 25,000 people to help build the new planes. This includes flight attendants, mechanics, and pilots.United's optimism about the recovery of air travel is evident in this order. Until now, domestic leisure flights have been the main focus. United announced Monday that it expects to report positive adjusted pre-tax income next months for the first time since January 2020.United Airlines and other airlines received $54 billion in federal pay-roll aid to keep workers employed. Scott Kirby, CEO of United Airlines, stated that the airline's strategy to keep pilots trained and flying the same planes allowed them to be ready for the rebound in demand.Boeing shares fell 1.8% to $235.76, while Uniteds lost 0.7% to $52.15, while S&P 500 finished 0.1% lower. Analysts had predicted that the airline would announce a large order.This large purchase, on top of United's Max plane order book, is another sign of confidence in United Aeroplane Maker. The company has been struggling to regain its footing following two Max crashes and numerous production issues.United plans to purchase 70 Airbus 321neos. This is in addition to the dozens of long-range versions of the plane.Although the sale is valued at more than $30 billion, airlines receive significant discounts, especially for large orders. United refused to reveal the amount it spent on the aircraft. Rob Morris, global head for consultancy at Ascend by Cirium who appraises aircraft and offers a variety of industry data, estimates that the order will be closer to $15 billion.About 500 narrow-body aircraft are expected to arrive by next year.Nocella stated that 200 of these planes will be used for growing the airline's fleet of 500 aircraft. 300 planes will replace older planes like its Boeing 757-220 planes which will be retired.Business travelersThese planes could replace 50-seat regional jets that were single-class and 50-seat. This is part of United's push to attract higher-paying travelers. United will be more competitive if it has larger planes that have more amenities and seats, according to an investor presentation.United executives stated that flying larger mainline jets will allow it to add more economy-plus and first-class seats or coach seats with more legroom. The company also revealed new interiors for its planes. These include larger overhead bins and seatback screens, which will allow passengers to carry their own bags.Delta Air Lines is taking aim at this focus on more expensive seats and customers willing to pay more for them. Delta had a strong focus on business travellers before the coronavirus pandemic. They were particularly focused on coastal hubs, which offer more legroom and larger jets that can travel between cities that have historically attracted valuable business travel.Analyst reports indicate that business travel demand has rebounded after the pandemic, but was severely affected by it.Kirby, United CEO, told reporters that he expected business and international travel demand will recover 100%. However, it is still below 60% from pre-pandemic levels. However the trend has been improving.Reintroduce seatback screenUnited will now equip its planes with seatback entertainment. This is a shift from United's previous strategy. Kirby had previously worked for Rival American Airlines before joining his current carrier as president five years ago. They removed seatback screens from older planes and also took in new narrow-body aircraft without them.Executives argued that travellers would stream movies from their own devices rather than using the company's electronic devices.Delta Airlines and JetBlue Airways offer still seatback entertainment systems.United said that it will provide a power outlet at every seat as well as larger bins to allow customers to carry a roll bag. This will help them avoid being checked for luggage at the gate. United will also upgrade its Wi-Fi access to improve broadband speeds across its fleet.
