Why United Will Be the Next 777x Customer

boeing's triple 7x promises to be a very capable aircraft building off the success of the triple seven family this new generation of jet aims to reduce fuel burn increase capacity and improve the customer experience despite this the type hasn't sold well as of late garnering fewer than 50 firm orders in the past four years and with the onset of covet 19 several airlines are reevaluating their triple 7x orders as boeing pushes back its entry into service so now might seem like an unlikely time for a reversal of fortune however there's a case to be made that united airlines a long time triple seven operator could be gearing up to place a sizeable order but why would united make such a deal especially in the midst of an industry downturn let me explain now say what you will about united it's not exactly a secret that the airline has its fair share of critics however it's undeniable that the airline has always been an innovator back in its early days it was the first airline to use modern day flight attendants the first us carrier to order jetliners and the first adopter of computer technology to plan flights more recently they were the first u.s carrier to order the groundbreaking 787 and the first to use commercial scale aviation biofuels but most importantly they've been extremely opportunistic when purchasing new planes and there's one particular example of this that strongly hints at united becoming the next triple 7x customer in order to find that example we're gonna have to rewind the clocks back to 2013. in that year boeing publicly launched the triple 7x while this was a huge milestone for the jet maker it also created a bit of a production headache rather than build a whole new assembly line boeing would instead build the triple seven x on the existing triple seven production line the problem was that the plane wouldn't be ready until 2020 and boeing didn't have enough existing triple seven orders on hand to bridge that seven year gap so in order to keep the line running they'd be forced to slow down aircraft output such a slowdown would inevitably lead to a revenue hit since boeing receives the majority of an airplane's payment when it's actually handed over to the airline to avoid this scenario boeing engaged in a renewed effort to sell more of the older seven 200 and 300 models the challenge though was that these variants would soon be made obsolete by their younger brother meaning demand would be scarce this is where united comes into play despite being the original triple seven launch customer the airline had yet to order the largest and most popular triple seven variant the 300 er and the decision to refrain from doing so was a bit odd while most established carriers were actively swapping out their gas guzzling 747s for wide body twins united was a holdout but holding out actually proved to be the right move in the long run once boeing's triple seven production problems arose united was presented with a golden opportunity all of a sudden the airline was in a strong negotiating position dealing with a jet maker that was hell-bent on selling outdated models in 2015 the airline pounced swapping 10 of its existing 787 orders into 10 for triple seven 300 ers and over the next few years the airline placed orders for an additional 12 units while the exact savings aren't known it's widely believed that by waiting united saved hundreds of millions of dollars on these jets so how does this deal foreshadow a potential triple 7x order well first we know this is an all-time great opportunity to purchase new aircraft both boeing and airbus are struggling to sell new jets amid the commercial aviation downturn with their share prices tanking both manufacturers would love a sizable order to shore up their backlog and help restore faith in their business what's more boeing in particular has struggled to sell the triple 7x in the last few years largely due to production delays and concerns over the plane's potentially excessive capacity given the fading confidence in the program a sizeable triple 7x order would be a massive win for boeing and whoever places an order for the type will be in line to receive steep discounts given that united has shown a propensity to capitalize on these sorts of opportunities and has a strong relationship with the jet maker they seem like a prime candidate but they wouldn't actually pull the trigger if they didn't actually have a need for these jets luckily they do between 1990 and 2017 united operated 44 747 400s and today united only operates 22 of the triple 7 300 ers that were meant to act as their replacements that leaves a 22-plane gap in their fleet now some of you might argue that united doesn't need the massive triple 7x to replace their equally massive 747s since they've actively grown their a350 and 787 fleets you might make the case that not only do these jets cover the lost capacity but they also afford greater operating flexibility and economics compared to jumbos now in a normal world that is a really good point but the world we're living in now is anything but normal and given recent circumstances united might be looking to expand their capacity beyond their pre-covet plans this may seem counter-intuitive most airlines have been shrinking their fleets in recent months not growing them but united is in a unique position in the wake of covet 19 many airlines will become defunct and when air travel returns to normal the supply of flights will no longer match the resurgent demand as a large carrier with lots of assets and an extensive route network united is well positioned to pick up that excess demand now it's true that united could order more 787s and a350s to do the job but given united's operating model too many planes might actually be a curse they've traditionally acted as a hub and spoke airline and are likely to lean on this strength in a post-covet world but the hubs that they operate at such as newark and san francisco are busy metropolitan airports where space is limited and operational expansion is more difficult the best way to increase capacity at these locations might be to increase the volume of passengers per flight not the total number of flights given that the triple 7x's massive size is tailor-made to connect large airports the jet seems like a perfect solution so what would such a deal actually look like well my guess is that united will only purchase the larger triple 7x variant the triple 7-9 and they'll place an order for something along the lines of 10 aircraft with options for 10 or so more if they place an order fairly soon i'd expect them to start receiving those jets in the final few years of the 2020s around that time united will also start taking delivery of their first a350s from airbus so should they choose to make such a deal they'd be setting themselves up quite nicely to have a robust and modern long-haul fleet going into the next decade so what do you guys think is it smart for united to purchase the triple 7x personally i'd love to see it i think that those folding wing tips would look really cool painted in united's new blue color scheme thanks so much to my patrons for helping to make this video possible and as always if you learned something new today leave a like and subscribe to keep learning and until i see you again don't forget to look up you

Channel: Coby Explanes

Views: 72,874

Rating: 4.8964558 out of 5

Keywords: 777x, Boeing 777x, 777-9, 777-8, Boeing 777, 777, United 777, United 777x, 777x orders, United, United Airlines, United 787, United a350, 777x customers, Boeing, 777-300er, United 777-300er

Id: bMYWoJBYNA8

Length: 8min 41sec (521 seconds)

Published: Fri Sep 04 2020