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United Airlines (UAL) Bumps Up Boeing 737 MAX Order, Shares Pop

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United Airlines Holdings Inc (UAL - Free Report) has placed an order for 25 additional Boeing 737 MAX planes and prescheduled delivery of some other orders in hopes of acceleration in travel-demand recovery. Following this news, shares of the company closed yesterday’s trading session 1.8% higher.

While the 25 additional Boeing 737 MAX aircraft are expected to be delivered in 2023, the carrier has moved up deliveries of 40 previously ordered Boeing 737 MAX aircraft to 2022 and 5 of the same variant of aircraft into 2023. In total, the carrier has firm commitments for 188 Boeing 737 MAX jets. After a 20-month grounding following two fatal air crashes, the MAX aircraft received clearance to fly again in November 2020.

A CNBC report quoted United Airlines’ chief commercial officer, Andrew Nocella, saying in a note to staff, “As we plan for the future and the return of demand, we’ve been looking at ways to best position our fleet for the recovery and be in a position to best take advantage of people’s desire to travel.”


Nocella further added, “And as the end of the pandemic nears and vaccines continue to roll out, today’s fleet announcement helps position us to meet the demand we expect to see in 2022 and 2023 and puts us on a path toward more opportunities for our employees in the future.”

Amid coronavirus-led suppressed travel demand, United Airlines’ passenger revenues (accounts for bulk of the top line) declined 70.2% year over year in 2020.

Zacks Rank & Key Picks

United Airlines carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Transportation sector are ArcBest Corp. (ARCB - Free Report) , Saia, Inc. (SAIA - Free Report) and Herc Holdings Inc. (HRI - Free Report) . While Herc Holdings sports a Zacks Rank #1 (Strong Buy), ArcBest and Saia carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of ArcBest, Saia and Herc Holdings have rallied more than 88%, 58% and 100% in the past six months, respectively.

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