PARIS (Dow Jones)--Executives of United Airlines, a unit of UAL Corp. (UAUA), were shopping for new aircraft at the Paris Air Show Monday, hoping to use their clout as a major buyer to make a deal with manufacturers that have taken just a handful of new orders this year.
Earlier this month, the airline said it planned to order new, more efficient planes as soon as this autumn. The airline, which hasn't taken delivery on planes since 2002, put off refreshing its fleet to conserve money.
In an interview, Kathryn Mikells, chief financial officer of the Chicago carrier, said United is meeting with plane makers Boeing Co. (BA) and Airbus as well as with engine makers.
"This is a long-term strategic decision about our fleet," she said. Although United now operates both Boeing and Airbus planes, the airline believes it would make economic sense to switch to a single fleet type over time, Mikells said.
"This decision will set our course for several decades," the executive said. United is looking to replace 100 of its large, widebody aircraft, and 94 smaller Boeing 757s. "This can happen simultaneously, although we haven't determined the size of our initial order," Mikells said. She said the large size of the order should allow United some flexibility on when it can take delivery of the planes. Mikells said United will explore financing arrangements with manufacturers as well as financial institutions, once the ordering process is further along.
The rising price of fuel makes replacing older aircraft more important than ever, since new planes can save 20% to 30% on fuel and maintenance costs.
Still, as airlines continue to struggle with weak revenue, some have worried that United may take on too great a financial burden; Fitch Ratings downgraded the airline's debt after the new fleet plan was announced.
Mikells said United remains committed to shoring up its balance sheet, and will continue to seek creative ways to do so.
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