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United Cancel Their Final B777 On Order  
User currently offlinePANAM_DC10 From Australia, joined Aug 2000, 4115 posts, RR: 90
Posted (9 years 4 months 1 week 3 days 23 hours ago) and read 8324 times:
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United filed with the SEC yesterday that contingent upon Bankruptcy Court approval they have reached agreement with Boeing to cancel their remaining 777 on order. This should "free up" the $45m deposit for other purposes. This 777 was the final airplane on order from their 1990 order for 744 & 777

Regards


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21 replies: All unread, jump to last
 
User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 1, posted (9 years 4 months 1 week 3 days 21 hours ago) and read 8110 times:

I thought this one was part of the UAL's second B777 order -- placed in the mid-to-late 1990s. No?

User currently offlinePANAM_DC10 From Australia, joined Aug 2000, 4115 posts, RR: 90
Reply 2, posted (9 years 4 months 1 week 3 days 21 hours ago) and read 8071 times:
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In the filing it states it was the final of 34 ordered in 1990.

Regards



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User currently offlinePM From Germany, joined Feb 2005, 6867 posts, RR: 63
Reply 3, posted (9 years 4 months 1 week 3 days 21 hours ago) and read 8002 times:

Quoting PANAM_DC10 (Reply 2):
In the filing it states it was the final of 34 ordered in 1990.

I believe the original order (1990 sounds about right) was for 34 firm and 34 options. They later converted 27 of the options, taking their total to 61. 60 of these were delivered and the cancelled plane is (was) the 61st and final on firm order.

In what order the various planes were delivered I have no idea. Maybe this particular example is indeed the 34th of the original order. Either way, it's gone.


User currently offlineWidebody From Ireland, joined Aug 2000, 1152 posts, RR: 8
Reply 4, posted (9 years 4 months 1 week 3 days 21 hours ago) and read 7986 times:

'Free up' the deposit? More like free up the outstanding payments on the total aircraft cost? Deposits, especially on aircraft, are non-refundable. They can be merged into other orders, but I understand United have no further orders with Boeing.

User currently offlineFlyinTLow From Germany, joined Oct 2004, 519 posts, RR: 0
Reply 5, posted (9 years 4 months 1 week 3 days 21 hours ago) and read 7978 times:

That's really sad. Love those 777s for UA. Kinda hard to believe that UA cannot utilize a 777, especially since everyone says intercontinental routes are where the money is for US airlines. And those would be the 777s routes...


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User currently offlineScotron11 From United Kingdom, joined Feb 2004, 1178 posts, RR: 3
Reply 6, posted (9 years 4 months 1 week 3 days 21 hours ago) and read 7942 times:

Quoting PANAM_DC10 (Thread starter):

This should "free up" the $45m deposit

The agreement with Boeing is for UAL to pay $14M "damages" for being allowed to cancel the order. The remaining £31M will be used as a credit against future orders, if there is one!


User currently offlinePANAM_DC10 From Australia, joined Aug 2000, 4115 posts, RR: 90
Reply 7, posted (9 years 4 months 1 week 3 days 21 hours ago) and read 7938 times:
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Quoting Widebody (Reply 4):
'Free up' the deposit? More like free up the outstanding payments on the total aircraft cost?

I'm assumed that the deposit would be included in the "Advanced payment" so perhaps the deposit is the part of the payment that Boeing retained as UAL said it would get a significant portion which does imply they have not had the full $45m returned. The only outstanding orders mentioned in the Filing are Airbus A319 & A320. No more on order with Boeing. Been a long time since United had no outstanding orders with Boeing.

Regards



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User currently offlinePM From Germany, joined Feb 2005, 6867 posts, RR: 63
Reply 8, posted (9 years 4 months 1 week 3 days 20 hours ago) and read 7914 times:

Quoting PANAM_DC10 (Reply 7):
Been a long time since United had no outstanding orders with Boeing.

True, but what's the betting on a 787 order in the fullness of time...?


User currently offlinePANAM_DC10 From Australia, joined Aug 2000, 4115 posts, RR: 90
Reply 9, posted (9 years 4 months 1 week 3 days 20 hours ago) and read 7895 times:
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Quoting Scotron11 (Reply 6):
The remaining £31M will be used as a credit against future orders

That'll be $31 not £  Wink In this case United can use those funds elsewhere and not for new orders with Boeing if they so choose.

PM

There are plenty of others who would be far more qualified than I to offer an opinion on that. I would like to see the end of CH11 for United though.

Regards



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User currently offlineBoeing Nut From , joined Dec 1969, posts, RR:
Reply 10, posted (9 years 4 months 1 week 3 days 17 hours ago) and read 7575 times:

Kinda ironic. The juggernaut company who launched the aircraft have to cancel the last one just to survive. How times have changed.  Sad

User currently offlineUnitedTristar From , joined Dec 1969, posts, RR:
Reply 11, posted (9 years 4 months 1 week 3 days 16 hours ago) and read 7377 times:

BoeingNut,

Obviously this is not to just survive. If you read the rest of the postings its not a refundable deposit. There is a penalty but even then the money won't be transferred back to United. It will be used toward future aircraft orders! It is definitely a good sign for United. They are planning future fleet plans! They are looking ahead! Its a positive! This is obviously saying that UA feels it doesn't need more 777's. My guess would be something smaller, perhaps the 787 or the 737's boeing is talking about selling based on the 787 technology! Not Ironic..Positive!

-m

 airplane 


User currently offlineN60659 From United States of America, joined Mar 2005, 654 posts, RR: 25
Reply 12, posted (9 years 4 months 1 week 3 days 14 hours ago) and read 6703 times:

On a different facet of the same issue here are a few questions:

(a) Was the aircraft a -200 or -200ER?
(b) When was it scheduled to be delivered.
(c) We know that carriers like AI, 9W and IC (among others) are wanting to increase capacity with aircraft in this class. Would any of them have a shot at that delivery slot?



Nec Dextrorsum Nec Sinistrorsum
User currently offlineNWAFA From United States of America, joined Dec 2003, 1893 posts, RR: 16
Reply 13, posted (9 years 4 months 1 week 3 days 14 hours ago) and read 6563 times:

United Transtar,

There is NOTHING that said there will be future fleet plans. UA is loosing that money....they are in no place, today tomorrow or next year to add more fleet. Having UA cancel their order helps with the daily expense of operating another a/c and lease payments on that, loosing the money they put down on it, is money that is already written off.



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User currently offlineKen777 From United States of America, joined Mar 2004, 8187 posts, RR: 8
Reply 14, posted (9 years 4 months 1 week 3 days 14 hours ago) and read 6399 times:

T7s are not cheap and I think UA is wise to avoid the costs (and cash flow) associated with another delivery. I would bet that the same discussions are going on with Airbus. UA needs to be in a position to operate with the planes they have until they are in a lot better position.

User currently offlinePANAM_DC10 From Australia, joined Aug 2000, 4115 posts, RR: 90
Reply 15, posted (9 years 4 months 1 week 3 days 14 hours ago) and read 6291 times:
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Quoting N60659 (Reply 12):
(a) Was the aircraft a -200 or -200ER?
(b) When was it scheduled to be delivered.

It was a 777-222ER
IIRC the frame was deferred with no scheduled delivery position to be freed

Regards



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User currently offlineN1120A From United States of America, joined Dec 2003, 26361 posts, RR: 76
Reply 16, posted (9 years 4 months 1 week 3 days 14 hours ago) and read 6162 times:

Quoting FlyinTLow (Reply 5):
That's really sad. Love those 777s for UA. Kinda hard to believe that UA cannot utilize a 777, especially since everyone says intercontinental routes are where the money is for US airlines. And those would be the 777s routes...

Well, they still have lots of them flying and they are not going anywhere for a while



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User currently offlineFriendlySkies From United States of America, joined Aug 2004, 4105 posts, RR: 5
Reply 17, posted (9 years 4 months 1 week 3 days 12 hours ago) and read 5513 times:

Quoting FlyinTLow (Reply 5):
Kinda hard to believe that UA cannot utilize a 777, especially since everyone says intercontinental routes are where the money is for US airlines.

No doubt that UA could use it...but they can't pay for it.  Wink


User currently offlineThrust From United States of America, joined Sep 2003, 2688 posts, RR: 10
Reply 18, posted (9 years 4 months 1 week 3 days 12 hours ago) and read 5392 times:

It is so disappointing to see that the launch/co-launch customer of the 727, 737, 767, and 777 in such a harsh financial future with too little cash to buy a single 772ER. For the 777 launch customer to trip at the finish line is truly a bummer. Save UA, Save UA  pray 


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User currently offlinePlaneSmart From New Zealand, joined Dec 2004, 871 posts, RR: 0
Reply 19, posted (9 years 4 months 1 week 3 days 12 hours ago) and read 5355 times:

Deposits on orders are publicly non-refundable, non-transferrable & non-deferrable. Deposits on options, if more than a dollar a plane, are usually refundable, transferrable and deferrable.

Just because it was stated publicly the depo is not being returned, don't count on it where UA & B are concerned. Most likely the depo will be used as a credit to acquire spares.

However, if this aircraft was to be purchased using external finance, or leased, there may well be financial penalties to be met for the funding.


User currently offlineGothamSpotter From United States of America, joined Jan 2005, 586 posts, RR: 0
Reply 20, posted (9 years 4 months 1 week 3 days 12 hours ago) and read 5268 times:

If UA "doesn't need" another 777, could that mean a full conversion to Ted is far behind? (j/k)

Seriously though, I don't see why they'd bother cancelling the order right now if they're not getting any cash back and it wasn't even slotted for construction yet. Is it possible the $31 million credit could be used for other Boeing products, namely replacement parts, meaning UA would actually see an immediate financial benefit from this deal?


User currently offlinePANAM_DC10 From Australia, joined Aug 2000, 4115 posts, RR: 90
Reply 21, posted (9 years 4 months 1 week 3 days 11 hours ago) and read 4985 times:
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Quoting PlaneSmart (Reply 19):
Just because it was stated publicly the depo is not being returned, don't count on it where UA & B are concerned. Most likely the depo will be used as a credit to acquire spares.

Thank you, I agree that in the case UA & Boeing there is a strong possibility of this occuring.

Quoting GothamSpotter (Reply 20):
I don't see why they'd bother cancelling the order right now if they're not getting any cash back

They do get the $31m and can do whatever they so choose with it contingent upon Court approval for the agreement with Boeing.

Regards



Ask the impossible to achieve the best possible
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