United Airlines Purchases 19 Used Boeing 737-700s To Maintain Capacity Amid Groundings

United Airlines
United Airlines first new livery Boeing 737-800 sits at a gate O'Hare International Airport in Chicago (Photo: Reuters / Kamil Krzaczynski)

In an effort to maintain its capacity amidst the ongoing grounding of its Boeing 737 Max airplanes as part of the global grounding of the model, United Airlines has announced that it would be buying used planes instead. The company revealed this week that it has signed an agreement to purchase 19 used Boeing 737-700 airplanes.

The Chicago-based airline did not disclose the name of the seller it will be buying the planes from, but it did reveal that it expects delivery of the planes by December of this year. The move comes amid the fifth month of the global grounding of the troubled Boeing 737 Max, which is still under investigation by aviation regulators worldwide. 

An investigation by aviation regulators started promptly after two fatal crashes occurred just five months from each other in Ethiopia and Indonesia, which killed a total of 346 passengers and crew members.  United has also announced that it would be extending its cancellation of 737 MAX flights to November, effectively canceling more than 5,000 flights.

United Airlines currently has 9 Boeing 737 Max airplanes in its fleet, all of which have been grounded for the past five months. The grounding of the planes has resulted in a drastic reduction in the carrier's capacity and consequently a drop in its overall bottom line. United intends to use the used Boeing models to replace the grounded planes.

However, the older models do have a slightly lower seating capacity compared to the newer model. The Boeing 737-700 has a capacity of 126 seats, while the Boeing 737 Max has a capacity of 179 seats.

The decision to purchase the used airplanes is also part of United's growth plans. The used plans are not meant to replace the company's Boeing 737 Max airplanes but are instead intended to supplement them once they are allowed back into commercial service. United previously revealed that it intends to expand its capacity by as much as 4 percent this year.

The purchase of the used planes isn't the first time the company has opted to go with used aircraft for its fleet. Last year, United purchased 20 used Airbus 319 airplanes to supplement its growing business and to expand its capacity. The outright purchase of used planes as opposed to leasing new ones is apparently much more financially feasible for the company.

Despite having 9 of its Boeing 737 Max airplanes grounded, United was still able to report a strong quarter performance. The company's revenue jumped by more than 6 percent to $11.4 billion for its most recent quarter compared to the same period last year. Its earnings report also managed to beat analysts' expectations for the quarter.

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