The Boeing 777-300ER, the most popular variant of the world's largest twinjet,
served as the workhorse of most long-haul fleets during the second half of the
2000s and the first half of the 2010s. Flying first with Air France in 2004,
the variant has sold over 900 units and served airlines across the globe.
Some carriers are even synonymous with the type, providing flagship services on the jet
alone. American Airlines' Flagship First product is only available on 777-300ERs,
and Air France's La Premiere can only be found on these aircraft.
One major carrier, the US giant United Airlines, turned down the opportunity to order the aircraft
for over a decade, despite a variety of incentives to make a purchase. While more
and more carriers filled their long-haul fleets with the -300ER, United remained a holdout.
Let’s examine this interesting strategy and how it paid off, in today’s video!
Over time, the 777-300ER has become relatively less efficient by modern standards,
and Boeing has since launched the 777X program,
the next variant of the twinjet. This officially took place in 2013.
With upgraded engines, more efficient performance,
increased capacity for more passengers, and various other technical upgrades,
the announcement of the 777X seemed to spell the end of the 777-300ER's glory days.
However, two full years after the launch of the 777X, United Airlines placed an order for
22 777-300ER aircraft. These aircraft would entered service with the airline in 2016 - a
full 12 years after the type's launch. While on the surface, the order seems a strategic mistake,
a look back in detail actually reveals an ingenious strategy behind the purchase.
To understand this story, it is critical to identify the role that the 777-300ER plays
within the United fleet. As advertised by Boeing, the 777-300ER has a capacity
of up to 386 passengers. This amount of cabin space fits nicely between the
passenger capacity of the now-retired 747-400s and the modern 787 Dreamliner.
With United Airlines’ 747-400s retiring in the mid-2010s,
there was no obvious replacement for the aircraft. The Airbus A380,
which was on the market at the time, was far too large and inefficient to fulfill this role.
Moving down the list, the Airbus A350 was both modern and did
possess a somewhat appropriate capacity - but this came with other challenges.
United didn't have an Airbus widebody in its fleet at the time,
and incorporating one would have brought along a multitude of logistical complications.
Additionally, the type's backlog was lengthy,
and even though the carrier ultimately did order the A350 a few years later,
the jets will not be delivered until the mid-late 2020s - if ever… (more on that later!).
A very clear candidate for the 747-400 replacement would be the 777X - a next-generation aircraft
that provides both modern performance and an expanded passenger capacity. However,
a variety of challenges on Boeing's production line would cause delivery
slots to be delayed even further, with deliveries now not expected until 2025.
The 777-300ER, with its high passenger capacity, could seamlessly integrate into
the United fleet. Indeed, it already included a variety of 777 variants.
However, as we have already noted, the aircraft was old and inefficient by modern standards,
lagging behind almost all the potential 747-400 replacements mentioned.
To dive deeper into why the 777-300ER was an ideal purchase for the carrier, it is important
to identify that the optimal replacement for the 747-400 will be the Boeing 777-9.
The 777-8, which has a more comparable capacity to the 777-300ER, was ultimately
determined to be interchangeable with its predecessor by the airline.
In 2015, amid the challenges in the 777X's production line, Boeing desperately needed
funds. Considering that the manufacturer receives a majority of an aircraft's payment upon delivery,
the company was not set to receive the monetary benefit of 777X sales for years.
Hence, although all official sale prices are strictly confidential,
United was likely able to negotiate a massive discount on its 2015 order for 777-300ER aircraft.
While the aircraft were outdated in terms of fuel efficiency,
their lower purchase price allowed the Star Alliance member airline to
make up and most likely stay in the green on the 777-300ER acquisition.
Furthermore, the first of these 777-300ER aircraft
were delivered to the carrier only a year after their purchase. This
allowed the airline to make immediate use of their new, rock-bottom-priced aircraft.
Nowadays, the 777-300ER aircraft are critical pieces of United's
long-haul fleet. The variant serves destinations around the world and is
equipped with the carrier's newest Polaris business class product.
With 22 of the type in service, they are among the highest capacity aircraft in the United fleet.
Equipped with 350 seats, these jets are often tasked with connecting major global hubs,
such as Hong Kong and San Francisco. Furthermore,
the jets nicely complement United's fleet of 787 Dreamliners, which serve slightly smaller markets.
When compared to other airlines, United's delayed purchase of the 777-300ER has placed the carrier
at a strategic advantage. While awaiting the 777X, lots of airlines continue to operate 777-300ER
aircraft that are approaching 15 years old, many of which are beginning to show signs of their age.
These carriers are either forced to seek out
a less than ideal replacement for the 777-300ER (such as the A350),
or else handle the higher maintenance costs associated with these older jets.
United's 777-300ERs are still in the prime of their service lives and will undoubtedly
serve passengers for years to come. In addition to 767s, 787s, and other 777s,
the 777-300ER jets contribute heavily to the dynamic nature of United's 2015-2025 fleet.
The question of what the United fleet will look like after 2025, however,
is more interesting to examine. Here, it is essential to remember that the airline
has ordered the Airbus A350 and has pushed the order back several times. Currently, United will
not receive any A350s before 2030, though many believe the carrier will never operate the type.
However, as previously mentioned, the United fleet continues to lack
a genuine replacement for the Boeing 747-400.
With the 777-300ER serving as an imperfect replacement,
there remains a gap in the airline's fleet at the highest level of passenger capacity.
With point-to-point travel growing more popular, many would wonder just how necessary an aircraft
with upwards of 350 seats would be. However, with airports growing larger and more and more people
flying, expansion in the late 2020s will involve increasing the number of passengers per flight,
specifically between large hubs (like those currently served by United's 777-300ER aircraft).
Given the strategically strong decision to purchase the 777-300ER far after the
variant entered the market, the carrier may not order the 777-9 (777X) now. Rather,
it might strike a deal perhaps years down the line. Or perhaps not.
One thing about United is for certain: the airline will leverage its own strategy and analyze
conditions within the market to determine the optimal time for the acquisition of new aircraft.
So what do you think of United’s decision to acquire the Boeing 777-300ER later than
other airlines? Do you agree with this analysis?
And finally - what aircraft type do you think it will acquire to replace these
jets once they’re ready for retirement? Share your thoughts by leaving a comment!
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