United Airlines faced financial challenges in the first quarter due to ongoing quality issues with Boeing aircraft. The airline reported a $200 million hit after the grounding of its Boeing 737 Max 9 fleet following a door plug incident on an Alaska Airlines flight. This incident raised concerns about the safety and quality of Boeing planes, impacting United Airlines significantly as it heavily relies on Boeing aircraft.
United did not confirm whether it expects reimbursement from Boeing for the grounding costs but stated that it would have been profitable without this expense. The airline had 86 Max 9 jets, the most of any airline globally, and the grounding affected its operations.
In addition to Boeing's problems, United faced other incidents like engine fires and wheel malfunctions, prompting CEO Scott Kirby to reassure customers about the airline's commitment to safety. The FAA increased scrutiny on United following these incidents.
Due to Boeing's issues, United revised its aircraft delivery expectations, anticipating 40 fewer single-aisle jets from Boeing this year. The airline froze pilot hiring and requested voluntary unpaid furloughs due to reduced flight operations.
United no longer expects delivery of the Boeing 737 Max 10 this year, with certification likely delayed until at least 2025. The airline converted some Max 10 orders to the Max 9 for future deliveries and reached agreements to lease Airbus A321neos as an alternative to Boeing aircraft.
Despite these challenges, United reported an adjusted loss of $50 million, an improvement from the previous year. Revenue increased by nearly 10%, driven by higher passenger miles flown and increased capacity despite the Max 9 grounding. Fares also saw a slight increase.
