United Airlines is offering pilots unpaid time off in May due to delivery delays with Boeing aircraft, the airline confirmed Monday.
14.03.2024 - 00:43 / insider.com / Scott Kirby / Ed Bastian / Henry Harteveldt / Michael Oleary / Richard Aboulafia / Airlines
Customers may soon feel the impact of the Boeing 737 Max blowout as airlines face uncertainty about their future fleets.
At a JP Morgan conference on Tuesday, executives from US carriers, including Alaska Airlines, Delta Air Lines, Southwest Airlines, and United Airlines, opened up about the effect on their businesses' bottom line as Boeing slows production of its best-selling airliner.
Bloomberg reported the CEOs shared similar stories about the delays, noting one of the biggest concerns is the abrupt change in expected Max deliveries and how that could affect airline ticket prices.
Southwest revealed it will only receive 46 of the previously planned 79 Max 8 variants it hoped to get this year, representing a 42% decrease, Bloomberg reported. The airline also said it doesn't expect to receive any of the yet-to-be-certified Max 7s this year and removed them from its 2024 plan.
Similarly, United CEO Scott Kirby said in January that the company will build an "alternative plan" for its fleet that doesn't include the Max 10, Boeing's other uncertified Max variant. At the JPMorgan event, he told Boeing to stop making the Max 10 for the airline — of which United has ordered 150 — in favor of Max 9s as continued delays leave the fate of the program in limbo, Bloomberg reported.
Delta Air Lines CEO Ed Bastian also expressed doubt over the Max 10 timeline. It ordered 30 of the planes in July 2022 as it hoped to grow its domestic network. According to Bloomberg, Bastian said the jet could now be delivered as late as 2027 — seven years after the Max 10 was initially expected to enter the market.
Alaska, the airline involved in the Max 9 blowout, said at the event that its schedule is "in flux" as it evaluates Boeing's production stall.
All of these concerns lead down the same road: Fewer available aircraft means airlines are forced to cut summer flying, likely resulting in higher airfare to make up for the lost revenue.
"It's a simple matter of supply and demand," aviation analyst Richard Aboulafia told Business Insider on Wednesday. "With new aircraft production heavily constrained, especially at Boeing, and a limited number of older aircraft that can be kept longer in service, and continued very strong demand, prices are likely to increase."
Michael O'Leary, the CEO of European low-cost airline Ryanair, is already warning of this reality at his carrier, saying passengers would see "slightly higher airfares" this summer due to Max delivery delays.
Travel analyst Henry Harteveldt told BI on Wednesday that airlines are likely to capitalize on this year's strong demand and "limit the number of seats sold at the lowest price points" for peak summer travel.
"Presuming the US economy holds steady, between the delays
United Airlines is offering pilots unpaid time off in May due to delivery delays with Boeing aircraft, the airline confirmed Monday.
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