United may amend $12.4b Airbus deal to take smaller jets

United Continental may convert a $12.4b order for Airbus Group’s largest twin-engine jet to smaller long-range models. It’s also interested in a new Boeing 737 Max that’s still on the drawing board. Those are among the multibillion-dollar changes under consideration as a new management team reviews the Chicago-based carrier’s order portfolio and revamps its fleet strategy, CFO Andrew Levy said. The goal: to close a profit gap with Delta and American Airlines. United is weighing the conversion of Airbus A350-1000s as it looks to replace its fleet of 747 jumbo jets. The carrier could switch to a smaller version of the aircraft, or even the mid-sized A330. That would dent Airbus’s order book, since United is the second-largest customer for the -1000 variant, which took its first flight last week. The airline also is studying the so-called Max 10X, a stretch of Boeing’s largest 737, after deferring 61 of the company’s smallest jets this month. The support from a blue-chip airline customer may help the planemaker close the business case for the proposed new variant, intended to help catch up to sales of Airbus’s A321neo. “These fleet decision are big decisions, they affect your balance sheet for a long time,” said Levy. “These are big capital decisions that you have to live with for a really long time, so you need to make sure you get it right.” The A350-1000 has only garnered 195 total orders, according to Airbus’s website. Levy said United also is rethinking its share buybacks after announcing a $2b repurchase plan this summer that followed a $3b effort from a year earlier. The pace may need to slow because of significant increases in labour expenses from several new union contracts as well as rising fuel costs, he said.<br/>