United's Avolar to market Airbus corporate jets
(UPDATE: Adds details throughout, analyst's remarks, paragraph 5)
CHICAGO, Nov 20 (Reuters) - Avolar, the business jet unit of United Airlines, on Tuesday said it agreed with European aircraft manufacturer Airbus to market corporate jetliners in North America.
Avolar will market, but not own, up to 15 Airbus jets to customers that can own all, or a fraction of the planes, which would be flown and maintained by United.
United's parent, UAL Corp. (NYSE:UAL - news), created the business jet unit in May targeted at providing travel alternatives for the lucrative business market. Avolar is expected to begin operations in 2002 and also plans to run a corporate shuttle business using the Airbus jets.
``It is a nice win for Airbus, but doesn't really change the outlook for either Airbus or Boeing,'' said Chris Mecray, an analyst with Deutsche Banc Alex. Brown. ``It is a new customer and a pretty good order, but they are all under pressure fundamentally and this doesn't really change that.''
The Airbus corporate jet, a member of the A320 airliner group and one of the largest business jets available, can be configured for up to 40 passengers. Airbus will continue to market the jet in North America itself as well.
United laid off thousands of employees and cut its schedule sharply to cope with the widespread downturn in air travel after the attacks on the U.S. in September, but also reaffirmed its commitment to the business market.
``Execution of the business plan is on schedule and results to date are far better than projected,'' Stuart Oran, president and chief executive of Avolar, said in a separate statement released late on Monday.
In October, Oran said Avolar would use aircraft from three different manufacturers to meet a variety of corporate needs including General Dynamics Corp.'s (NYSE:GD - news) Gulfstream planes and Dassault Aviation's Falcon jets.
Avolar has said nearly two dozen furloughed United pilots, flight attendants, dispatchers and administrative personnel are being hired and trained by Avolar.
Avolar is in discussion with private equity investors relating to UAL's sale of a majority interest in Avolar, but UAL plans to maintain a significant interest.