United pulls plans for Boeing’s biggest 737 Max jet after Max 9 groundings



United Airlines Holdings Inc. on Tuesday said it was rethinking its longer-term plans for Boeing’s biggest 737 Max jet, the Max 10, after the government’s grounding of dozens of Max 9s this month raised questions over whether the aircraft maker could still deliver planes on time.

United
UAL,
+5.31%

Chief Executive Scott Kirby said during the airline’s earnings call on Tuesday that it wasn’t canceling its orders for the Max 10. But he said the airline was taking the jet “out of our internal plans.”

“We’ll be working on what that means exactly with Boeing,” he said. “But Boeing is not going to be able to meet their contractual deliveries on at least many of those airplanes.”

United, during the call, said that it had 277 Max 10 jets on order for the rest of the decade. Of the 107 jets set for delivery this year, 31 were Max 9s. But Chief Financial Officer Michael Leskinen said was “unrealistic” to expect those jets to arrive as currently planned.

“Look,” he said. “The reality is that with the with the Max grounding, this is the kind of straw that broke the camel’s back with believing that the Max 10 will deliver on the schedule we had hoped for.”

He added: “It’s a great aircraft. But we can’t count on it. So we’re working on alternate plans.” 

The decision on the Max 10 marks the latest blow to Boeing’s
BA,
-1.60%

reputation, as safety concerns pile up after a panel tore off a 737 Max 9 jet flown by Alaska Airlines earlier this month.

The Federal Aviation Administration grounded 171 Boeing 737 Max 9s for inspections, leading to scores of flight cancellations for both United and Alaska
ALK,
+2.87%
.
United, when it reported fourth-quarter results on Monday, said it expected to lose money in the first quarter, following the impact of those cancellations. Still, shares were up on Tuesday on United’s full-year profit forecast.

The FAA over the weekend also recommended that operators of Boeing’s 737-900ER planes “visually inspect mid-exit door plugs to ensure the door is properly secured.” Regulators around the world grounded the 737 Max in 2019 after two fatal crashes.

Meanwhile, Ben Minicucci, the chief executive of Alaska Airlines, in an interview with NBC News published Tuesday, said inspectors found loose bolts on “many” of its Boeing 737 Max 9s after the mid-flight blowout.

“I’m more than frustrated and disappointed,” he said in that interview. “I am angry. This happened to Alaska Airlines. It happened to our guests and happened to our people. And my demand on Boeing is, what are they going to do to improve their quality programs in-house?”



Source link

2023. All Rights Reserved.