United is giving up on Boeing's 737 Max 10

26.01.2024 - 18:41 / travelweekly.com / Scott Kirby

United Airlines has removed the largest version of the Boeing 737 Max, the Max 10, from its internal plans.

"The Max 9 grounding is the straw the broke the camel's back for us," CEO Scott Kirby said during an early morning interview with CNBC.

United has had 150 Max 10s on order since 2021. But the aircraft has yet to receive FAA certification, and many believe certification will be further delayed due to the greater scrutiny Boeing now faces in the aftermath of the Max 9 grounding.

Kirby said Boeing will be five years behind on Max 10 deliveries in a best-case scenario.

"We are not canceling the order, we are taking it out of our internal plans," the CEO elaborated during United's earnings call later on Tuesday. "We'll be working on what that means exactly with Boeing. But Boeing is not going to be able meet their contractual deliveries on at least many of those airplanes."

Kirby didn't offer information on an alternative plan and steered clear of a CNBC question on whether the carrier will turn to Airbus to replace the Max 10 planes. United introduced the Airbus 321neo, which is the closest aircraft competitor in terms of size to the Max 10, to its fleet last month. United has a total of 130 A321neos on order and expects to have 31 of the aircraft in its fleet by the end of this year.

Kirby did say that Boeing's Max 10 delays would likely cause United to grow more slowly than it had planned.

United is slated to receive 107 Max 9 planes this year, but CFO Michael Leskinen said Boeing isn't likely to deliver all those planes. Last year, Boeing failed to come through on 24 scheduled deliveries to United across various aircraft types.

Leskinen promised details on United's revised fleet plan no later than early May, when the company hosts an Investor's Day event.

Kirby said that he is confident that Boeing is striving to fix its manufacturing woes.

"I'm encouraging them to do it even faster," he said.

United earns $2.62B in 2023

United reported full-year 2023 net income of $2.62 billion, up from $737 million in 2022. Operating revenue was $53.7 billion, up 19.5% from 2022. United's operating margin for 2023 was 7.8%, up from 5.2% a year earlier.

For the fourth quarter, United reported net income of $600 million, down from $843 million in the final quarter of 2022. United recorded operating revenue for the quarter of $13.63 billion, up 9.9% from the previous year. The carrier's operating margin for the quarter was 7.3%, down from 11.1% in the fourth quarter of 2022.

For the current quarter United is projecting a loss, partly because of the impact of Max 9 grounding.

United expects to have its 79 Max 9s back in operation by the end of the month.