The Boeing problem alone cost United $200 million

The Boeing problem alone cost United $200 million

United Airlines has been pushed by Boeing and its ongoing quality issues, the airline said on Tuesday. The company hit $200 million in the first quarter after the Boeing 737 Max 9 was grounded following a door plug incident on an Alaska Airlines flight.

United has not said whether it expects to be reimbursed by Boeing for the cost of grounding the 737 Max 9 for three weeks following the January 5 incident. But it says that it will be profitable without the cost of grounding.

A blowout on an Alaska Airlines flight led to a three-week Federal Aviation Administration grounding of the 737 Max 9 model jet, and raised new questions about the safety and quality of Boeing’s planes. United, which relies on Boeing aircraft for about 80% of its mainline fleet, has 86 of the Max 9 jets, more than any other airline in the world and has been hit hard by Boeing’s problems.

But United has also been hit by a series of other incidents, including engine fires and wheels falling off planes, problems that have received heightened attention following Boeing’s problems. It has forced United CEO Scott Kirby to reach out to customers to assure them the airline itself will place a greater focus on safety by its own employees. The FAA also said it was putting United under greater scrutiny. Boeing’s publicity woes and jet grounding aren’t the only ways the planemaker has hurt United.

The airline said on Tuesday it now expects to take delivery of just 61 single-aisle jets from Boeing this year, or 40 fewer than it expected earlier this year. The airline previously revealed it had frozen pilot recruitment, and it asked pilots to take voluntary unpaid leave due to a reduction in the number of flights it operates.

United now says it no longer expects the Boeing 737 Max 10, the newest and longest version of the Boeing 737, to be delivered this year. The plane has not been certified to carry passengers by the FAA. With questions about the quality and safety of Boeing’s jets, the certification may have been pushed back to at least 2025.

So United said it had converted some of those Max 10 orders to Max 9s for delivery from 2025 to 2027, and said it might convert more orders to smaller versions of the plane.

Worrying Boeing, United also said on Tuesday that it had reached an agreement with two lessors to lease 35 new Airbus A321neos, the 737 Max competitor. Deliveries of the Airbus aircraft will arrive in 2026 and 2027.

United said it had an adjusted loss of $50 million in the quarter, an increase from the $207 million loss it suffered in the same period last year. Revenue increased nearly 10% to $12.5 million.

Most of that gain came as miles flown by paying passengers rose 9%, as United was able to increase capacity from a year earlier despite the 737 Max 9 being grounded. Fare measures, such as the average amount paid by passengers for each available seat, adjusted for miles flown, rose about 1%.

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