Big Demand For Smaller Boeing, Airbus Jets

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United Airlines, which now includes Continental Airlines, is reportedly in talks with major manufacturers to order up to 200 aircraft made up of Boeing and Airbus models, possibly by year-end. The news, reported this week separately by both Reuters and Bloomberg, comes hot on the heals of a "largest ever" order for 230 Boeing aircraft announced last week by Jakarta-based airline Lion Air, and a July order from Delta and AMR. The July deal accounted for 460 aircraft split as 260 from Airbus and 200 from Boeing. Industry analyst Richard Aboulafia of the Teal Group says U.S. carriers have been lured by re-engined narrow-body airliners that offer them competitive advantage. Aboulafia believes carriers are now jockeying for early positions. United may be considering other factors, as well.

United currently operates about 710 aircraft, of which 550 are single-aisle jets. Its fleet includes 137 Boeing 757-200 aircraft (with an average age of over 17 years) and 34 737-500 aircraft (at an average age of nearly 15 years). "These carriers want to get in line before the early production slots fill up," Aboulafia told Bloomberg news Wednesday. Boeing has updated its 737, the world's most flown jetliner, and now offers the more efficient 737 MAX. Airbus has upgraded its own top seller, the A320, offering it as the A320neo. The aircraft are expected to enter service in 2017 and 2015, respectively, and both list for close to $90 million per copy. Airlines typically purchase in bulk, taking discounts that reduce the price per copy. United flies a mix of Airbus and Boeing jets. In 2010 it merged with Continental, which has flown Boeing aircraft for the past two decades.