Major United Airlines order ends new-business drought at Airbus

June 29, 2021, 6:45 PM UTC

Following a drought of new business due to the malaise in Europe’s leading airlines, Airbus looks to have nabbed enough incoming plane orders to tip it into the green for the first half of 2021.

Airbus had recorded billings for 94 aircraft through May, but because of the collapse of Norwegian Airlines earlier this year, cancellations of 125 orders drove the total net figure deep into the red

Thanks to United Airlines agreeing to purchase 70 new A321neo single-aisle planes for delivery from 2023 to 2026, Airbus would have to suffer 40 cancellations this month for the figure to remain negative. Experts say that kind of attrition is unusual. 

A spokeswoman for the company declined to comment ahead of July 8, when the first-half orders and delivery figures are set to be released.

Although United also announced the purchase of 200 Boeing 737 Max jets, analysts see the Airbus order as notable. “This is a large order for its flagship product from a high-profile American carrier that historically operates a Boeing fleet, so it has even more significance,” said Andrew Gollan, a London-based equity analyst with Berenberg Bank.   

More importantly, however, he believes the order is a sign that Boeing is struggling to come up with an answer to the A321neo. 

Able to seat from 180 to 220 passengers in a typical two-class arrangement, it can fly 4,000 nautical miles. That is 20% farther than the equivalent 737 Max 10, which won’t even enter service until 2023

By that point Airbus hopes to raise the stakes with the A321XLR. This seats the same number of people but can fly 4,700 nautical miles, thanks to a third and optional fourth fuel tank located in the fuselage of the plane, in addition to the two on the wings.

Airbus management’s real problem now may be ensuring its supply chain can actually keep pace with its needs. The company recently warned suppliers they need to ramp up their production.  

“The focus has switched from managing production cuts to ramp-up planning,” said Gollan. “New orders are more of a concern for Boeing, since its backlog is thinner in the narrow-body sector, while Airbus production of the A320 family is effectively booked out for the next 13 years at current rates.” 

Currently the order book for the A320neo family is over 5,600 aircraft, and a large chunk of that is for the larger A321neo.

Subscribe to Fortune Daily to get essential business stories straight to your inbox each morning.