United Airlines (NASDAQ:UAL) a major American airline headquartered at Willis Tower in Chicago, Illinois decided on Friday to get rid of 22 Boeing planes as it reduced May flight schedule by 90%.
UAL reached a deal with Singapore based Bank of China (BOC) Aviation that involves six Boeing 787-9 and 16 Boeing 737-9 MAX aircraft’s.
The point of the deal is to sell those planes to BOC and then lease them back. This way United gets a lump sum cash payment up front to cover current costs. This is a pretty common practice, moving cash from an asset that you cannot use at the moment .
Shares of United Airlines Holdings Inc (NASDAQ: UAL) closed at $29.08 on Friday which is $50 cheaper compared to February 19, which is just 2 months ago. I am sure United Airlines stock is one of the best airline stocks at the moment. Once air traffic is back to at least 50% of what it used to be before coronavirus outbreak those prices will go above $50.