United Airlines Lost $200 Million From Boeing Max 9 Grounding

17.04.2024 - 13:37 / forbes.com / Scott Kirby / Airlines

United Airlines would have turned a profit in the first quarter of 2024 had it not been for a door plug blowing off an Alaska Airlines jet mid-flight in January.

Instead, United is reporting a pre-tax loss of $164 million, reflecting a $200 million hit from the Federal Aviation Administration’s grounding of the Boeing 737 Max 9, which forced the airline to cancel thousands of flights over several weeks. The incident also sparked an FAA investigation into Boeing’s safety practices and an ongoing criminal investigation.

United and Alaska Airlines are the only two U.S. airlines to operate the Max 9. Earlier this month, Alaska announced it had received a $160 million cash payment from Boeing in compensation for lost revenues stemming from the door plug blowout.

United’s $164 million Q1 loss is a $92 million improvement over the same quarter last year. During the quarter, the company generated an operating revenue of $12.5 billion, up 9.7% compared to first-quarter 2023, as well as $2.8 billion in operating cash flow.

Even now that the Max 9 is back in the air, Boeing’s problems continue to be United’s problems. Certification delays for the Max 7 and Max 10 have hampered the airline’s longer-term plans to shift to larger aircraft. United, which had initially expected to receive 80 Max 10s in 2024, will not receive any this year. Last month, United canceled its Max 10 order and told Boeing to build Max 9s instead from 2025 to 2027.

“We’ve adjusted our fleet plan to better reflect the reality of what the manufacturers are able to deliver,” United CEO Scott Kirby said. “And, we’ll use those planes to capitalize on an opportunity that only United has: profitably grow our mid-continent hubs and expand our highly profitable international network from our best in the industry coastal hubs.”

In addition, United has signed letters of intent to lease 35 new Airbus A321neos with CFM engines expected in 2026 and 2027.

Looking forward, United says it expects a small number of aircraft previously scheduled to enter into service in the second quarter to be pushed into the third quarter, which the airline expects to have minimal impact on its capacity plans.