United Considers Buying New Boeing 767 Passenger Jets

United Continental Holdings Inc. said it is considering replacing older wide-body planes with new Boeing Co. 767 jets, in what would be a surprising revival of fortune for the 35-year-old aircraft.

Boeing stopped making the passenger version of the twin-aisle plane three years ago but recently increased production of models converted for use as military refueling tankers and freighters. Now the aerospace giant is looking at ways to restart production of a passenger 767 to meet emerging demand from airlines seeking to replace aging jets in the next several years, according to people familiar with Boeing's plans.

The focus is on reviving the 767-300ER, the most popular version of the jet family which can seat about 200 passengers. This would also help satisfy demand before the company launches a new twin-aisle jet in the middle of the next decade, according to the people familiar with Boeing's plans.

Boeing recently established a program office for its proposed new midsize airplane -- dubbed the 797 by some in the industry -- but hasn't definitively decided to build the plane.

Boeing declined to comment on customer discussions.

Chicago-based United operates 51 of the current 767 passenger jets on trans-Atlantic routes and to South America. The airline has been assessing options for replacing the planes, which are close to 20 years old on average. Analysts had expected United, which operated the first 767 in 1982, to select either new Boeing 787 jets or Airbus A330s to replace them. New 767s would be less expensive.

"We have not recently asked for an offer for any particular wide-body aircraft type but have in the ordinary course of discussions asked for information about several wide-body aircraft, including the 767," a United spokeswoman said.

Boeing has delivered more than 700 passenger versions of the jet since the plane was introduced. Other big operators include Delta Air Lines Inc. and American Airlines Group Inc. Delta, which has 82 767s, said it wasn't thinking of adding new 767s. American declined to comment.

Boeing has 101 outstanding orders for the military and cargo versions of the plane and recently raised annual output to 30 767s to meet orders from the Air Force and FedEx Corp.

Amazon.com Inc. has contracted two cargo carriers to fly converted 767s for its Prime Air unit. That fleet is expected to grow to 40 planes next year. Its new cargo hub in Kentucky has space for 100 aircraft.

The demand for freighters has led to a shortage of older passenger models available for conversion to cargo use, and Boeing expects the military tanker version to win as many as 400 orders.

"We don't see the 767 line as a sunset-ing production line," Boeing Chief Executive Dennis Muilenburg said on an analyst call last month. "It's a strong, long-term production line, and it does have some growth opportunities for us."

--Susan Carey contributed to this article.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

November 05, 2017 09:14 ET (14:14 GMT)