United reports loss on US$200 million hit from Boeing grounding

UNITED Airlines reported a first-quarter loss on Tuesday due to the temporary grounding of some Boeing jets, as it announced plans to lease Airbus planes in light of delayed Boeing deliveries.

The roughly three-week grounding of the 737 MAX 9 in January resulted in a US$200 million hit to results, leading to a quarterly loss of US$124 million.

Revenues rose 10 per cent to US$12.5 billion.

The major US carrier was impacted more than rivals by the MAX 9 grounding, which followed a January emergency landing of an Alaska Airlines flight after a panel on the fuselage blew out midair.

Boeing is expected to pay compensation to airlines, but United’s press release didn’t mention such payments.

United said it enjoyed a “strong” operational performance in the period, while adding that the demand environment remains “strong.”

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But pointing to “the 737 MAX 9 grounding and the FAA’s announced significant production capacity constraints,” United now expects just 61 narrow-body aircraft in 2024, down from the January estimate of 101.

United said it also had signed a letter of intent with two lessors to lease 35 new single-aisle Airbus A321neos in 2026, 2027.

Shares rose 4.7 per cent in after-hours trading. AFP