United Airlines Inks Deal to Buy Aircraft from Boom Supersonic


United Airlines Holdings (UAL) has teamed up with Denver-based aerospace company Boom Supersonic to add 50 zero-emission ‘Overture’ aircraft to its global fleet. Once operational, Overture aircraft will be capable of flying at twice the speed of the fastest airplanes that are available today, meaning that it could cut travel times in half.

Furthermore, Overture will offer additional features like in-seat entertainment screens, ample personal space, and contactless technology.

Per the terms of the deal, United Airlines will initially buy 15 ‘Overture’ airliners from Boom Supersonic on Overture meeting UAL’s safety, operating, and sustainability requirements, with an option to buy 35 more aircraft in the future.

According to the company, Overture will be the first large commercial aircraft to have net-zero carbon emission from the very first day and will run on 100% sustainable aviation fuel (SAF). (See United Airlines stock analysis on TipRanks)

Overture airliners are expected to launch in 2025, start flying in 2026 and carry passengers by 2029. Both the companies intend to work together to speed up the production of SAF supplies.

United CEO Scott Kirby commented, “United continues on its trajectory to build a more innovative, sustainable airline and today’s advancements in technology are making it more viable for that to include supersonic planes.”

Kirby further added, “Boom’s vision for the future of commercial aviation, combined with the industry’s most robust route network in the world, will give business and leisure travelers access to a stellar flight experience.”

On May 26, Goldman Sachs analyst Catherine O’Brien reiterated a Buy rating and a price target of $67 (16.1% upside potential) on the stock.

O’Brien stated, “United published an investor update this morning, guiding to better June Q revenue and EBITDA margin, driven by improvements in the yield environment vs. prior expectations.”

Overall, the stock has a Moderate Buy consensus rating based on 5 Buys, 7 Holds, and 1 Sell. The average analyst price target of $61.64 implies 6.8% upside potential from current levels. Shares of UAL have jumped 47.7% over the past year.

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