United orders 40 737-700s to replace RJs

We are continuing to move United forward and announced today we would take delivery of 40 new Boeing 737-700 aircraft, which will enter the fleet beginning in mid-2017.

It was reported by an global news agency last week that United would purchase at least part of its fleet from Boeing.

An analyst in NY says the order suggest there is good demand in the market for aircraft even after sales dropped in 2014.

Separately, Southwest Airlines Co said it had ordered 33 of Boeing’s 737-800 aircraft, a deal it struck in December but announced on Thursday.

The 737-700s can seat 126 people and will be flown by United’s own pilots, reducing the company’s reliance on contractors as a shortage of regional pilots looms in the United States.

Though the C-Series is expected to enter service later this year with Swiss Global Air Lines, Bombardier still does not have an order from a major North American carrier.

A spokesperson from the airplane maker said earlier in the week that the plane was a top contender with a number of important campaigns. The planes will replace some of the smaller, older planes operated by the airline’s regional carriers.

Another competitor for the United order, Brazil’s Embraer, declined to comment on the Boeing deal.

The CS100’s list price is $71.8 million, but Leeham News reported that due to Bombardier’s write-off of $3.2 billion in the plane’s development costs, the price of the plane may have been lowered to the upper $20 million range.

United’s current Boeing 737-700 fleet seat 118 passengers, with 12 business class, 40 Economy Plus and 66 Standard Economy seats.

REPORT: Where Are the Sales for Bombardier’s CSeries Jet?

In a note to clients, Desjardins analyst Benoit Poirier wrote on Thursday that CSeries orders “will remain the key catalyst for Bombardier’s share price”, which closed down more than 9 percent at C$1.09 ($0.7637). It has been stuck at 243 firm orders for almost 16 months.