United Airlines is raising concerns about its future orders and deliveries of Boeing 737s following a recent incident involving an Alaska Airlines plane. The U.S. airline made the decision to ground its fleet of 79 Boeing 737 Max 9 aircraft on January 6, a day after a panel became detached from an Alaska Airlines plane during flight, causing damage to the fuselage and necessitating an emergency landing. While there were no fatalities or serious injuries, U.S. regulators grounded 171 jets of the 737 Max 9 fleet with a similar configuration to the plane involved in the incident.
United Airlines announced on Monday that it expects these aircraft to remain out of operation until the end of January, resulting in financial losses in the first quarter of 2024. During a conference call on Tuesday, Michael Leskinen, United’s chief financial officer, revealed that out of the 107 aircraft the airline plans to receive this year, 31 are Boeing 737 Max 9s. Leskinen expressed skepticism about the delivery of all these aircraft as initially planned, stating that it is currently unrealistic to expect them to be delivered on schedule.
In addition to their Max 9 orders, United Airlines has 277 Boeing 737 Max 10 aircraft on order for the rest of the 2020s, which are yet to be certified, and options to purchase an additional 200 aircraft. Leskinen indicated that they anticipate a reduction in orders and deliveries from Boeing in 2025, with the orders for the 737 Max 10s likely to be affected as well. He mentioned that the Max grounding has caused doubts about the expected delivery schedule for the Max 10s, prompting the airline to work on an alternate plan.
Following the release of strong fourth-quarter results on Monday, United’s shares experienced a nearly seven percent increase in mid-day trading. Conversely, Boeing’s shares saw a slight decline of around 0.7 percent.
United Airlines is uncertain about future orders and deliveries of Boeing 737s after grounding its fleet of 79 Boeing 737 Max 9 aircraft due to the Alaska Airlines incident. The airline expects the aircraft to remain out of action until the end of January, resulting in losses for the first quarter of 2024. United’s CFO stated that it is unrealistic to believe all planned aircraft deliveries will occur as scheduled. This uncertainty may also impact orders of Boeing 737 Max 10s. Despite this, United reported strong fourth-quarter results, causing their shares to rise while Boeing’s shares declined slightly.
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