United changes up big Boeing 737 order

United Airlines will convert the bulk of two orders for Boeing’s best-selling narrowbody jetliner to the planemaker’s newest variant.

The Chicago-based airline is changing its orders for 65 Boeing jets from all 737-700s to four 737-800s and 61 737 Maxes.

Just more than two-thirds of the 737 is made in Wichita.

United said in a Securities and Exchange Commission filing Tuesday that it expects to receive the 737-800s next year while delivery dates for the 737 Max jets are “to be determined.”

“These changes will allow United to take advantage of the superior fuel efficiency of the MAX aircraft while also reducing capital expenditures by approximately $1.6 billion through 2018,” the airline said in its filing.

Shares of Boeing ended 1.25 percent lower on Tuesday to $148.11 on speculation that the order change will mean less revenue for the company in the short term.

The order conversion means Boeing won’t be getting as much cash as quickly as it would have under the original orders. Boeing hasn’t even begun delivering its Max variant.

The order change also comes before Boeing planned to increase its monthly production rate on the 737 from 42 aircraft a month to 47.

Teal Group analyst Richard Aboulafia said United’s order conversion “doesn’t do any favors” to bridge the gap between production of the 737 Next Generation and Max. He also thinks this could be signaling the peak of the 737 production cycle and any plans by Boeing to further increase its monthly production rate of the plane.

“That whole onward and upward to 60-rate thing doesn’t look real,” Aboulafia said.

Boeing spokesman Doug Alder said in an e-mail the conversion will not affect its production rate plans.

“We’re excited that United will be adding even more MAXs to its future fleet, and we appreciate their confidence in the airplane,” Alder said. “We constantly work with our airline customers to meet their evolving needs, and our healthy 737 backlog of 4,321 airplanes gives us the flexibility to meet those needs.”

Spirit AeroSystems in Wichita manufactures 70 percent of the current 737 Next Generation aircraft and will do the same for the new Max variant.

United is a major carrier at Wichita Eisenhower National Airport, operating daily flights to Chicago, Denver and Houston.

This story was originally published November 15, 2016 at 2:15 PM with the headline "United changes up big Boeing 737 order."