United CEO says airline will consider alternatives to Boeing's next jet
The United Airlines CEO says he is "disappointed" in ongoing manufacturing problems at Boeing that have led to the grounding of dozens of United jetliners, and the airline will consider alternatives to buying a future, larger version of the Boeing 737 Max.
United Airlines CEO Scott Kirby said Tuesday that Boeing needs "real action" to restore its previous reputation for quality.
Kirby's comments came one day after United disclosed that it expects to lose money in the first three months of this year because of the grounding of its Boeing 737 Max 9 jets.
United has 79 of those planes, which federal regulators grounded more than two weeks ago after a panel blew out of an Alaska Airlines Max 9 in midflight, leaving a gaping hole in the plane. Investigators are probing whether bolts that help hold the panel in place were missing or broken off.
Kirby said on CNBC that he believes the Max 9s could be cleared to fly again soon, "but I'm disappointed that the manufacturing challenges do keep happening at Boeing."
Over the past few years, manufacturing flaws have held up deliveries of Max jets and a larger Boeing plane, the 787. Last year, United received 24 fewer Boeing aircraft than it expected.
United has a standing order for Max 10 jets, a larger version of the Max line. However, that model and a smaller one, the Max 7, are years behind schedule for being certified by the Federal Aviation Administration. The grounding of the Max 9 jets is likely to further complicate Boeing's drive to get the new models approved.
Kirby said the Max 10 is at least five years behind schedule and could be pushed further into the future.
"I think this is the straw — the Max 9 grounding — is probably the straw that broke the camel's back for us," he told CNBC. "We're going to at least build a plan that doesn't have the Max 10 in it."
Kirby wasn't specific about what planes the airline could acquire instead of the Max 10. Still, he noted only one other global manufacturer of such large planes — Boeing's European rival Airbus.
Doing without the Max 10 probably means United won't grow as fast as hoped, Kirby added.
Stan Deal, CEO of Boeing's commercial airplanes division, apologized for the Max 9 grounding and said the company is making changes.
"We have let down our airline customers and are deeply sorry for the significant disruption to them, their employees, and their passengers," Deal said in a prepared statement. "We are taking action on a comprehensive plan to bring these airplanes safely back to service and to improve our quality and delivery performance."
Shares of United Airlines Holdings Inc. rose 6% Tuesday. After the end of regular trading Monday, the company said it would lose up to 85 cents per share in the first quarter but earn $9 to $11 per share for all of 2024.
Shares of The Boeing Co. fell less than 1%.
