American air carrier United Airlines (NASDAQ:UAL) is reportedly mulling buying Airbus (FR:AIR) jets as delays and safety concerns sting rival Boeing’s (NYSE:BA) business. United’s CEO Scott Kirby had recently flown to Toulouse, France, to discuss the possibility of ordering Airbus’ A321neo planes to fill the void left by Boeing’s Max 10 certification delays. Talks are still in the initial stages, with no guarantee of a final deal.
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American aircraft manufacturer Boeing and European rival Airbus are in constant competition to win larger orders from global air carriers.
About UAL-Boeing Ties
Boeing has long been a preferred jet manufacturer for United Airlines. However, recent events have challenged Boeing’s ability to manufacture quality and safe aircraft. Importantly, UAL had ordered 277 Max 10 jets from Boeing, which remain pending until the latter receives the certificate to deliver them.
A Reuters report stated that United’s CEO Kirby plans to order Airbus A321neo jets, depending on the availability of orders. These single-aisle, longest-fuselage jets have robust demand. However, Airbus’ order book seems to be full for the decade. Consequently, any plans by United Airlines to purchase these jets could be hampered, leaving the carrier with no choice but to depend on Boeing.
Meanwhile, UAL might have to revisit its deal for Max 10 jets with Boeing, given the ongoing issues. UAL also flies Boeing’s Max 9 jets, which were partially grounded following an Alaska Air (NYSE:ALK) mid-flight incident. Those jets resumed flights on January 27. United also has an order for 45 Airbus A350s, for which deliveries have been delayed until 2030. The two companies have reportedly agreed that any order for A321neos will also mean that Airbus will try to deliver the A350 jets as per a stringent timeline.
What is the Price Target for Airbus?
Recently, Berenberg analyst Phil Buller lifted the price target on AIR stock to €105 (29.7% downside) from €100 while maintaining a Sell rating. Last week, Deutsche Bank analyst Christophe Menard raised the price target on AIR to €165 (10.5% upside) from €152 while reiterating a Buy rating.
On TipRanks, AIR stock has a Moderate Buy consensus rating based on 10 Buys, two Holds, and two Sell ratings. The Airbus Group SE share price forecast of €156.82 implies 4.8% upside potential from current levels.
