United Close To Small Jets Order

United Airlines is close to deciding an order for about 30 small jets worth around USD$2 billion, with Boeing looking well placed to win at least part of the deal.

A decision by United to pick Boeing's 737-700 jet would be a blow for Bombardier, which has courted United as a key prospect for its CSeries.

United's requirement for 100-seat aircraft is in the natural hunting ground for Bombardier and Embraer, but Boeing waded in with highly competitive offers for its slightly larger 737-700, which officially seats 126 passengers, Reuters news agency reported.

United said it did not discuss future fleet plans. Boeing said it did not discuss market speculation. Bombardier, Embraer and Airbus, another possible contender, also declined comment.

United is cutting the number of 50-seat jets it contracts to others to fly under its United Express brand and moving towards larger and more efficient planes flown by its own pilots.

United's tender for 30 or more 100-seaters ignited a fierce battle at the lower end of the USD$130 billion annual jet market, where the Airbus-Boeing duopoly is most under threat.

Bombardier is looking for a headline-grabbing win from a big name such as United or JetBlue as its CSeries prepares to enter service after delays and cash problems.

Embraer is seeking an endorsement from an existing customer with at least part of the deal, while analysts say Boeing is keen to fill spaces in its production line as it prepares to transition to the 737 MAX series.

Airbus and Boeing have seen little demand for their smallest single-aisle variants as demand surges for more popular 150-200 seaters. But they enjoy the ability to offer discounts due to high overall volumes and low marginal costs.

Aircraft valuations expert Stuart Hatcher of UK-based IBA Group said during an industry briefing that despite a recent dearth of orders, the CSeries should increase its presence this year. But he warned that the market for small airliners could be smaller than Bombardier hoped because of more new competition.