United Airlines Holdings Inc. has decided to exclude Boeing Co.’s largest 737 Max model from its plans due to manufacturing challenges faced by the aircraft manufacturer. The decision comes as Boeing’s ongoing production issues threaten to cause further delays to an already behind-schedule aircraft. While United has not officially cancelled its order for the Max 10, the airline has removed it from its internal plans, according to Chief Executive Officer Scott Kirby.
During a conference call with analysts to discuss quarterly results, Kirby expressed concerns about Boeing’s ability to meet contractual delivery commitments for many of the Max 10 aeroplanes. United initially placed an order for 277 Max 10 aircraft, with options for an additional 200.
The decision reflects the broader impact of the 737 crisis, triggered by a safety incident involving another version of the plane that led to the grounding of all Max 9 jets. Increased scrutiny from US safety regulators could potentially delay the certification of the Max 10 and the yet-to-debut Max 7 variant.
Kirby has reportedly conveyed his frustrations with Boeing’s management and the handling of the grounding. Although he did not explicitly state his current stance on Boeing’s leadership during the call, Kirby emphasized the need for Boeing to expedite necessary changes.
The Max grounding is expected to impede United’s growth in the coming years, disrupting the carrier’s plans under its United Next expansion initiative. Chief Financial Officer Mike Leskinen indicated that the airline is exploring alternatives, including the Airbus SE A350 widebody aircraft, with potential deliveries starting in the 2030s.
While Kirby expressed optimism about resolving the Max 9 grounding, he cautioned that United’s patience with the delays in certifying the larger Max 10 is wearing thin. He stated that the Max 9 grounding was a significant factor influencing the airline’s decision, and he expressed disappointment with Boeing’s ongoing manufacturing challenges.
Despite these challenges, United’s shares rose by 7% in New York trading, reaching $41.14 at 1:08 p.m., following a better-than-expected profit forecast for the year. The airline anticipates earning an adjusted $9 to $11 per share in 2024, alleviating concerns related to high costs, supply chain delays, and hiring issues.
