United Airlines Blames Boeing for $200 Million Loss in First Quarter

United Airlines reports $124M loss due to 737 MAX 9 grounding, faces other operational issues, but forecasts better-than-expected Q2 profit amid revenue growth.

Dil Bar Irshad
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United Airlines Blames Boeing for $200 Million Loss in First Quarter

United Airlines Blames Boeing for $200 Million Loss in First Quarter

United Airlines reported a $124 million, loss, quarter of 2024, which it blamed on the three-week grounding of its Boeing 737 Max 9 fleet after a panel blew off an Alaska Airlines Max jetliner in January. The grounding cost United $200 million, enough to turn a small profit into a loss, us, million, grounding .

United said it now expects to receive 61 Max jets this year, down about two-thirds from previous expectations, and has begun leasing Airbus jets to fill out its fleet. The airline also faced other operational issues, including a piece of aluminum skin falling off one plane and a tire dropping off another during takeoff.

The airline has had to adjust its long-term fleet strategy due to delivery timeline issues at Boeing, including converting some Max 10 orders to Max 9 and reducing its expected aircraft deliveries this year. United's strategy, dubbed United Next, has been upended by the Boeing incidents, which have impacted its operations, financial position, and cash flows.

Why this matters: The grounding, cost of Boeing's 737 Max 9 aircraft has had significant financial consequences for United Airlines, the largest operator of the plane. The incident highlights the ongoing challenges faced by Boeing and the broader aviation industry in ensuring the safety and reliability of aircraft.

Despite these challenges, United forecast better-than-expected profit in the second quarter, with revenue rising nearly 10% to $12.54 billion in the first quarter. United's CEO, Scott Kirby, addressed the operational issues, stating, "We've faced some unique challenges so far this year – the 7 day grounding of 79 of our 737 MAX 9 aircraft in late February, severe winter weather throughout January and February, and most recently, the temporary grounding of 16 of our 777-200 aircraft."

Key Takeaways

  • United Airlines reported a $124M loss in Q1 2024 due to 737 MAX 9 grounding.
  • The 737 MAX 9 grounding cost United $200M, turning a small profit into a loss.
  • United expects to receive 61 MAX jets this year, down 2/3 from previous expectations.
  • United faced other operational issues, including aircraft component failures during flights.
  • United forecasts better-than-expected profit in Q2, with Q1 revenue up nearly 10%.