United Airlines executives said Tuesday they are considering alternative plans for future growth following the grounding of a Boeing 737 MAX 9 following a mid-air explosion on an Alaska Airlines plane earlier this month.
United Airlines is rethinking the place of the Boeing 737 Max in its fleet
by aparodyoflife ·
“The reality is that with the Max being discontinued, this is the straw that broke the camel’s back with the belief that the Max 10 would meet the timeline that we had hoped for,” United’s chief financial officer, Michael Leskinen, told analysts during an update on the matter. The airline’s financial results.
United CEO Scott Kirby said the company would not cancel its order for the Max 10s. But the company no longer expects it to be delivered on time.
“Boeing will not be able to meet its contractual deliverables on at least many of those aircraft and I will leave it at that,” Kirby said.
United had hoped to incorporate the Max 10 into its future growth plans, but uncertainty surrounding when the FAA would certify the plane as passenger-ready means the carrier will have to move forward without relying on those aircraft deliveries.
Kirby said he remains confident in the plane’s manufacturer.
“They’re going through a tough patch right now, but I think Boeing is committed across the board from top to bottom to turn it around and fix it,” Kirby said.
After the plane’s failure, critics wonder: Has Boeing learned from the MAX accidents?
The financial and operational impact of the grounding may be more significant for Alaska Airlines, which is scheduled to report earnings on Thursday. Although the carrier has fewer Boeing Max 9 planes, the 65 planes make up more than 25 percent of Alaska’s main fleet.
United’s financial forecasts and executives’ comments highlight the growing fallout from the Jan. 5 incident on an Alaska flight, in which a plug covering an optional emergency exit flew off the side of the plane, leaving it with a gaping hole. No one was seriously hurt, but the Federal Aviation Administration grounded the plane the next day and was working with Boeing on a plan to inspect other Max 9 planes currently in service to ensure their safety. The suspension of flights led to the cancellation of thousands of flights on both United and Alaska, and shook confidence in Boeing.
The disruptions come after a relatively smooth year for the airline industry, following a difficult recovery from the coronavirus pandemic, with the cancellation rate falling to 1.2 percent, according to federal data. The improved conditions boosted airline finances, with United reporting $600 million in earnings for the fourth quarter of 2023.
Stan Deal, president of Boeing’s aircraft division, acknowledged the disruptions on Tuesday and said the company was following the FAA’s lead.
“We have failed our airline customers and are deeply sorry for the significant inconvenience they, their employees and their passengers have experienced,” Deal said in a statement. “We are taking action on a comprehensive plan to safely return these aircraft to service and improve quality and delivery performance.”
Boeing did not respond to questions about the future of the Max 10, which remains under prior review by the Federal Aviation Administration (FAA).
Kirby said the airline’s technical team has been working 18 hours a day over the past few weeks to ensure the Max 9 can safely return to service when not anchored to the ground.
The Federal Aviation Administration is investigating possible defects in Boeing’s manufacturing process
United is a major Boeing customer. In June 2021, the airline announced its largest aircraft order in the company’s history: 200 Boeing 737 MAX aircraft and 70 Airbus A321neos. At the time, the order was a major boost for the 737 MAX and the largest by a US airline After FAA certification, they are safe to fly again after fatal accidents in Indonesia and Ethiopia.
The cause of the Alaska incident remains under investigation, as officials seek to determine whether screws designed to hold the plug in place were installed properly. This has raised new questions about quality control at Boeing. The FAA has launched a separate review of the company’s manufacturing process and Boeing has hired a new internal consultant to conduct an internal review.