United Airlines suffered a $200 million hit to its earnings in the first three months of the year, a result of grounding its Boeing 737 MAX 9 fleet for three weeks due to a mid-air cabin blowout incident on an Alaska Airlines flight in January. This incident pushed the airline to a pre-tax loss of $164 million for the quarter, although United mentioned that it would have reported a profit otherwise. Despite the unexpected loss, United’s shares saw a 5% increase after the announcement, signaling investor confidence in the airline’s recovery.
With 79 Boeing 737 MAX 9s in its fleet – more than any of its rivals – United Airlines, along with Alaska Airlines, was forced to cancel thousands of flights for inspections before the US aviation regulator allowed the planes to resume flying. The airline’s chief financial officer, Brian West, praised their customers for their support and commitment to safety and quality enhancements. Additionally, United informed investors that delays to deliveries of Boeing planes had impacted its operations, prompting adjustments to the fleet plan to align with manufacturing capabilities.
While Boeing faced new pressure following a whistleblower report highlighting safety concerns over the construction of some of its planes, the company refuted the allegations and maintained confidence in the safety of its aircraft. Engineer Sam Salehpour, set to be a key witness at a US Senate hearing, accused Boeing of taking shortcuts in the construction of its 787 and 777 jets, leading to threats of termination after raising concerns. The incident in January reignited concerns over the safety of Boeing’s aircraft, following two fatal crashes of 737 Max 8 jets in 2018 and 2019 that claimed 346 lives.