United Airlines Defers And Converts

United Airlines has deferred some of the outstanding orders it has with jet maker Boeing. In an effort to preserve cash the US airline has deferred the delivery of 61 Boeing 737-700. The deferral should free up some $1.6B in cash.

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United Airlines picks Boeing

Earlier this year Boeing and Bombardier engaged in a battle to win an order from United. The airline ended up picking the Boeing 737-700 over Bombardier’s all-new C-Series aircraft. It is widely assumed that the airline obtained very steep discounts on the Boeing 737-700 as Boeing tried to keep Bombardier out of the door.

However, less than a year later the airline is deferring those deliveries and will convert them to the Boeing 737 MAX 8 or 9 and 4 Boeing 737-800 aircraft. With this decision it seems that United is pushing back the deliveries at least 1 year.

The deferral does spark concern over the sustainability of Boeing’s planned production hikes for the Boeing 737 program.

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