United Airlines' Growth Strategy Looks Too Ambitious
Last week, United Airlines Holdings (NASDAQ: UAL) announced a massive aircraft order and a bold new five-year plan. The airline giant plans to grow dramatically while shifting its fleet to significantly larger aircraft by 2026 to improve its profitability.
Management clearly recognizes the key shortcomings that have weighed on United Airlines' financial performance over the past decade. The company's growth plan tackles those issues head-on. But its planned expansion is likely to create new problems, as it will flood the domestic travel market with capacity.
United Airlines announced two big aircraft orders on Tuesday. It will buy 50 more 737 MAX 8s and 150 additional 737 MAX 10s from Boeing, along with 70 A321neos from Airbus. These deals add to United's nearly 300 outstanding orders for mainline aircraft as of March 31: 180 737 MAX jets and nine 787-10 Dreamliners from Boeing, along with 50 A321XLRs and 45 A350-900s from Airbus.
Source Fool.com
