NEW YORK ( TheStreet) -- The Boeing (BA - Get Report) 767, once presumed to be an aircraft with little future, has a new lease on life.

Two airlines, FedEx (FDX - Get Report) Express and United (UAL - Get Report) , are renewing their commitments to the aircraft, which was introduced in 1982. Last week, FedEx ordered 50 767-300F freighters. Meanwhile, United said that next month it will begin conversion of its 21 three-class Boeing 767s to two-class.

On its Web site, industry consultant Air Insight noted on July 22 that "in about five weeks time the 767 program will be 33 years old. Yet the program just got its biggest order to date. FedEx ordered 50 and 50 options.

"The FedEx order is a strong vote of confidence," the publication said. "It certainly looked like the aircraft was past its prime. This order is truly old airplane revenge."

United, in an internal publication for technical operations employees, said last week that the modifications it will make to its 767s "include many behind-the-scenes but vitally important improvements that should extend the life of the fleet by years and improve reliability."

In an interview, Brian Znotins, United's vice president of network, said refurbishing 767s makes sense because of the low cost basis and the high consumer satisfaction level.

It can be better to use an older, paid-for airplane than a newer one that is more fuel-efficient. "We plan long-term fleet at $3 fuel," Znotins said. (In the second quarter, United's mainline average fuel price was $2.12 a gallon).

"With the low ownership of airplanes already in the house, they are pretty competitive with next generation airplanes, and you don't want to pay for more than you need," he said. "Why pay for an 8,000-mile (range) airplane if you only need a 6,000-mile airplane?"

Recently, United has been increasing its 767 use on trans-Atlantic routes, freeing 757s for use on trans-continental routes. "We were going to retire the 767s and use 777s on the Atlantic, but in the last few years we have watched the demand level on the Atlantic and it hasn't grown," he said.

Additionally, he noted, the 767s score high in United passenger consumer ratings. United, which polls passengers by email and gets 8,000 responses a day, has found that the Boeing 767s with remodeled interiors are the second most popular widebodies, after the 787s. "Inside, they look brand new," Znotins said.

"The new interiors -- including seats, entertainment systems, bins, panels, galleys and crew-rest areas -- will inherently be more reliable than the aging systems and fixtures on the existing fleet," the carrier said in its employee newsletter. "Current interior components and systems account for the majority of our short delays on 767-300s, so putting in a new cabin nose to tail should drive down those delays considerably."

The modification period will take up to three months per aircraft and will include safety and reliability improvements, "some mandated by airworthiness directives and others identified by Reliability Engineering as having the greatest reliability return on investment," the carrier said. "According to Tech Services VP John Wiitala, this was the most extensive review of its kind we've ever conducted on a subfleet."

United's fleet includes 35 Boeing 767-300ERs from pre-merger United and 16 767-400s from pre-merger Continental. It is upgrading 21 of the 300s; 30 aircraft have already been upgraded.

While the FedEx order is worth nearly $10 billion at list price, aircraft valuation firm Avitas placed the value at about $4.2 billion after discounts, according to The Seattle Times. "FedEx, which has historically bought airplanes cheaply nearing the end of their production life, likely got an even better deal," the newspaper reported.

The first 50 aircraft will be delivered between 2017 and 2023. FedEx now has a total of 106 of the 767 freighter jets on firm order. Boeing plans to increase 767 production from 1.5 a month to two per month.

Meanwhile, it has not been such a good summer for the KC-46 tanker, the military version of the 767.

Last week, Boeing reduced its full-year 2015 guidance because development problems resulted in a charge of $835 million. After lower tax considerations, the accounting charge is reduced to $536 million, or 77 cents a share.

 

 

 

 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.