Having stood on the sidelines, biding its time until the market and its balance sheet seemed more clear, United’s announcement that it is planning a 150-aircraft order over 25 years has set the speculation machines a-flutter as observers try to parse out just why United is making its move at this particular time.

Some say it is a bid to wring out the best deals in a market that has Airbus booking few new orders this year and Boeing booking zip. Others wonder if it is related to the growing activity on the environmental front as U.S. airlines, and their worldwide counterparts, face the deadline for Europe’s emissions trading programs set for effect in 2012. However, this year, emissions plans are due in August outlining how they intend to meet the European rules and track emissions. US airlines have pledged to sue to block the EU plan’s inclusion of U.S. airlines, saying it violates current international law.

The winner-take-all request for proposal went out to just Boeing and Airbus, putting paid to any speculation that United is thinking way outside of the box to include the Bombardier CSeries which has only been ordered by All Nippon and Lufthansa. However, focusing on narrow bodies alone misses the point that United is thinking in terms of extended range narrow bodies to serve the now overcrowded international markets. The airline, itself, said it the new planes would replace 111 wide bodies and 97 Boeing 757s. Such an order could be valued at about $10 billion.

Fuel rose over $71 per barrel this week, making newer fleets more valuable especially since analysts say if fuel tops $85 p/b airline projections could go out the window. A newer fleet would not only mean more fuel efficiency but a consequent drop in emissions. While the industry cites passenger impacts at $1b+, environmental groups point to an EU analysis that says round-trip ticket prices would rise between $6 and $56 by 2020. Still, in this environment a $6 increase would be impossible to sustain given the rising costs to airlines of various old and new government- and airport-imposed fees, oil and the weakened demand.

Observers say the deal could be announced as soon as this fall, should manufacturers accede to the airline’s wishes. United is looking for three things from the manufacturers, including good pricing. Facing tight lending coupled with a bad credit rating and heavy losses, it wants manufacturer financing so it can hold and/or improve its cash position. It is also seeking flexibility on changing the order.

Having already retired more than half of its aging 737 fleet with the rest coming out of the fleet by year’s end, United has significantly lowered its average 400-aircraft fleet age to 13 years.

The announcement comes after the airline has proudly proclaimed its lack of orders in conference calls quarter after quarter even under close questioning from analysts and has pointed to its efforts to chase liquidity to ensure it can survive and prosper. Its order also bucked the usual aircraft ordering trend which sees airlines ordering in good times only to end up taking delivery in down times when they can least afford new capacity. Delivery of United’s new plane will be after the upturn is expected to truly take shape in 2011.

Environmentalist contentions that airlines have had it easy in the carbon debate compared to electric power and auto segments is laughable in the face of the industry’s efforts that have cut emissions by 90% over the past decades to account for only 2% of emissions worldwide. While U.S. airlines have pledged another 31% reduction in emissions by 2035, having already achieved a similar reduction since 1990, the International Air Transport Association this week committed to achieving carbon-neutral growth by 2020. Airlines are included in the Waxman-Markey climate bill now making its way across Capitol Hill.

Meanwhile, Lufthansa published its most recent sustainability report saying it has a carbon balance with results showing average fuel burn per passenger is 4.3 liters over 100 km. The results come from the implementation of 120 environmental measures last year and an investment of 194 million in environmental training and education for the 36,000 employees at its Frankfurt base. Those measures included saving 80% of energy consumption on its flight simulators and certifying its cargo system to ISO 14001 standards. It is also testing lightweight containers for further savings. In addition, variable steering of cold storage equipment at LSG Sky Chefs has reduced energy consumption by 30 per cent. The new engine water wash method developed by Lufthansa Technik can reduce the fuel burn of the Lufthansa fleet by up to 25,000 tonnes of kerosene and thereby curb CO2 emissions by more than 78,000 tons.

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