Boeing Expects Big Ual Order Total Value Could Exceed $3 Billion

UAL Corp.’s United Airlines is expected to announce a multibillion-dollar order for Boeing Co. planes as early as today, according to people familiar with the order.

Analysts estimated the order could be worth more than $3 billion.

United’s order is expected to include Boeing 747 planes and several Boeing 777s, the Seattle-based airplane maker’s latest model. It may also include smaller 737s, the people said.

Chicago-based United has said it plans to buy 97 aircraft in the next five years, replacing 93 aging planes and expanding its fleet by four. The airline needs to replace some Boeing 737-200s and 747-100s, as well as some DC10s made by McDonnell Douglas.

“United is experiencing a lot of growth in Pacific markets, so they’ll need more 747s and 777s to keep up with demand,” said Mark Ray, who manages John Hancock Financial Services’ $2 billion transportation bond fund.

A Boeing spokeswoman said she couldn’t immediately comment. A United spokesman declined comment.

A potential United order was originally reported in May but wasn’t confirmed by either company.

Chicago-based United is one of several U.S. airlines expected to place big plane orders with Boeing and its competitors in the next few years. Airlines are enjoying record profits and are flush with cash they can use to buy new planes.

“Airlines are trying to get orders confirmed,” said Peter Jacobs, an analyst at Ragen MacKenzie in Seattle. “They don’t want to be left out.”

Paul Nisbet, an analyst at JSA Research Inc., said he thinks the order announcement could boost Boeing’s stock as much as $3.

“The reality is always better than the expectation,” Nisbet said.

Winning another order for 777s from United would be a big endorsement for Boeing. In March, a memo from a United official to Boeing was made public in which he said the 777 had caused “intolerable” flight delays and cancellations.

United officials have since said that they are working with Boeing to correct the problems.

“All in all, United has been reasonably happy with the 777, and Boeing has been cranking them out to meet potential demand,” said Wolfgang Demisch, an analyst at BT Securities.

United also needs smaller planes to replace 737s moved to the West Coast to be used for its fast-growing Shuttle by United operations.

However, the airline doesn’t necessarily have to buy 737s as its small planes. People familiar with the order said United is still debating whether to by A-319s from Airbus Industrie, Boeing’s European rival.

Sandy Smith, an Airbus spokeswoman, said the company is still in discussions with United about a possible order. She declined to comment further.