United wants to acquire 40 used Airbus SE jets to get costs under control

Published on : Wednesday, November 1, 2017

United leaked inadvertentlyUnited Continental Holdings Inc wants to take as many as 40 used Airbus SE jets to open the short distance services as the airline struggles to get costs under control.



United Continental Holdings, Inc. is a publicly traded airline holding company headquartered in the Willis Tower in Chicago is looking at A319 and A320 single-aisle aircraft.




The Chicago chapter of the United pilots union said in an October 10 memo to its members. A deal for 30 to 40 of the jets is “imminent”.




The planes are operated by U.K. budget carrier EasyJet Plc are a probable source of the aircraft, people familiar with the matter said.




Most of the planes would be A319s, said one of the people, who asked not to be named because the information is confidential.




EasyJet is declined to comment, but has its own plans to take over leases on A320s from Air Berlin Plc, which is being liquidated.




The hunt for used planes underscores United Continental Holdings efforts to decrease all the expenses as it seeks to regain investor confidence in its turnaround plan.




The shareholders punished the Chicago-based carrier earlier this month after an earnings call in which management failed to establish how it would contend with rising costs and improve profit margins to the level of industry leader Delta Air Lines Inc.




The executives of United are pursuing “a plane they already have in their fleet. “They can add them inexpensively and there is no additional cost for spare parts or to train pilots and mechanics.




It isn’t clear how United would configure the used planes or where they would fly.




The existing A319s is capable to seat 128 passengers and its A320s carry 150. They are used primarily on domestic routes.




The current market value for 30 decade-old A319s is about $480 million, while 30 A320s of the same vintage is roughly $690 million, according to consulting firm Avitas.





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