United CEO reportedly kickstarts Airbus talks amid Boeing delays

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United Airlines has approached Airbus about buying more A321neo jets to fill a potential void left by the delayed Boeing 737 Max 10, in a trade-off likely to ease deadlock over a long-delayed separate order for larger jets, industry sources said.

United CEO Scott Kirby flew to Toulouse recently to sound out the planemaker on a potential quid-quo-pro deal after a mid-air emergency on an Alaska Airlines 737 Max 9 raised new doubts over certification of the already delayed Max 10, they said.

“United Airlines has been in talks with Airbus about possible alternatives to the Max 10 order. To my knowledge no agreement has been reached,” a person familiar with the discussions said.

Talks are at an early stage and there is no guarantee of a deal, the sources said.

Airbus and United Airlines declined to comment.

Kirby’s previously unreported trip to Toulouse is the latest twist in a widening crisis engulfing Boeing as the planemaker seeks to reassure the public and regulators about production quality and safety while preventing key orders from unraveling.

Kirby last week called the Max 9’s partial grounding “the straw¬†that broke the camel’s back” following certification delays to the Max 10, the largest member of a jet family tarnished by an earlier safety crisis caused by two fatal crashes.

United has not cancelled any of the 277 Max 10 jets it has on order, but it has removed them from internal plans, Kirby told reporters last week, leaving questions over how it would fill the gap at a time when rival Airbus is heavily sold out.

Bloomberg News on Friday reported that Airbus was seeking to buy back A321neo positions from the jet market to be able to construct a proposal should there be an opening.

Trade publication Air Insight reported Airbus and United were in talks.

Any deal between United and Airbus would depend on the scarce availability of the A321neo, which is the most in-demand jet in its category, and the status of United’s contract with Boeing, which is expected to be the subject of intense discussions.

Kirby said last week United had not canceled Max 10s, but added: “Boeing is not going to be able to meet their contractual deliveries on at least many of those airplanes and let’s leave it at that.”

Signs of a potential Airbus deal have raised “concern” at Boeing, a senior industry source said.

But the planemaker is unable for now to give the clarity that United and others want over the Max 10 because of doubts over the certification timeline.

Boeing, which has pledged to tackle quality problems that may have caused a door plug to blow off a Max 9 and led to the partial grounding, declined to comment on commercial discussions.

Boeing Commercial Airplanes CEO Stan Deal said in a letter to staff on Friday it was “deeply sorry for the significant disruption and frustration for our customers.”

United resumed Max 9 flights on Saturday.

A350 deliveries

The talks come as Airbus has firm control of the busiest part of the jet market where its 240-seat A321neo has a strong lead over the upcoming Max 10.

By contrast, it has failed to deliver a single one of its larger A350 jets to United after winning a sale as far back as 2010, after a subsequent merger between United and longstanding Boeing customer Continental Airlines triggered a review.

The orders have been progressively delayed to around 2030.

Industry sources said both sides provisionally agree any deal for A321neo jets would revisit the 45 A350s United has on order and at least include a firmer timeline for deliveries after several deferrals by the Chicago-based airline.

United’s Chief Financial Officer Michael Leskinen said last week it was looking to start taking the deliveries of A350s in the early part of the next decade to replace old Boeing 777s.

United has long been a crucial battleground as Airbus challenged Boeing for a piece of its domestic market and ultimately overtook it as the world’s largest manufacturer.

In 1992, Airbus snatched an order for A320s that broke United’s reliance on Boeing, with which United shares corporate roots.

The unexpected deal triggered a rethink that contributed to the launch of the Max’s predecessor, the best-selling 737NG.

Now, United’s urgent need for planes is shaping up as a milestone in the problems facing its successor, the Max.

The latest Max crisis and wider questions over the state of the plane market duopoly are expected to dominate an annual meeting of aviation financiers in Dublin starting on Monday.

Sumber: www.cnbc.com

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