2nd Hand Planes

2. hand plane

Several of the world's largest airlines have caused a stir in recent months with their large aircraft orders. Delta's done this before. With one step out of the Delta play-book, United will consider a transaction to buy up to 40 used Airbus aircraft. The purchase of used aircraft is part of the airline's plan to reduce costs and win back investor trust. Supporting costs containment and increasing sales were at the forefront of management's decision to be beaten by analytical experts at the October third quarterly teleconference when they were either not able or not willing to provide detail on United's financing restructuring plan.

Delta Airlines, the market leading company, has significantly higher profits and is known to have added used planes to its portfolio in the past, which does not seem to have been lost on United's senior staff. From 2000 to 2010, Delta expanded its inland fleets to include the Northwest DC-9 and purchased more used planes.

Other airlines used to spend billion of US dollar on new fuel-efficient Boeing 737s and Airbus 320s as anchor for their home fleet. However, when this occurred, the aircraft markets were overrun with older but still survivable MD80, 717 and MD90 aircraft, which Delta took in at rock-bottom rates. Recently, an airline-consultant was cited who said the acquisition of used Airbus aircraft was "a low-cost way to create top capacity" for the troubled United Airlines and would give a much-needed push to the short-haul services.

There is an undisclosed allegation that aeroplanes owned and controlled by EasyJet, a UK-based low-cost airline, may be the origin of the aeroplanes. The majority of them will be A319s and A320s and will be singles aisles. According to United Piloten, the total number of jet planes to purchase is limited to 30 or 40 at that point in foray.

As there is an upper limit to the number of used aircraft United will buy, the business could actually be done for less money. In general, the aircraft bought are used on home flights, but it is still not clear where United would take them. The only thing United CFO Andrew Levy had to say last summers was that entering the used aircraft business is "an important part of our airline business strategy".

At present, the fair value of a used Airbus A319 is approximately $480 million. Check this out against the $2.7 billion listing for new planes and United's motifs become clear: saving cash, simply and simply. It is not the first that United has ever sold used planes. As early as 2015, the Chinese carrier already acquired used planes from China.

On this occasion, the pilot's note revealing the detail did not make it clear whether this new (or used) series of aircraft was being bought or rented or not. In other ways, United is also focusing on reducing costs. Deliveries of the new two-aisle Airbus A350 have been delayed to 2022.

In addition, United converted the 61 Boeing 737s shipped in November to a more fuel-efficient version.

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