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United Airlines Reports Financial Loss Due to Boeing Woes
United Airlines recently announced a $124 million loss, attributing it to Boeing’s ongoing issues. The airline revealed that this loss would have been a profit if not for the troubles stemming from Boeing’s aircrafts.
Agreement with Boeing
In an attempt to rectify the situation, United Airlines disclosed that it had reached an agreement with Boeing. This agreement aims to compensate the airline for the grounding of the 737 Max 9 aircrafts and delays in the certification of the 737 Max 10 jets.
Although United Airlines did not divulge the specifics of the deal, it mentioned that Boeing plans to offer compensation in the form of “credit memos.” These memos can be utilized for future purchases from Boeing, thereby offsetting some of the financial losses incurred by United Airlines.
Grounding and Financial Impact
In January, the Federal Aviation Administration took action to ground numerous 737 Max 9 planes following an incident on an Alaska Airlines flight where a door plug blew off. Consequently, United Airlines suffered a loss of $124 million during its most recent earnings quarter.
United Airlines emphasized that this financial setback would have been avoided if not for the grounding of the jets earlier in the year. The company estimated that the groundings and associated delivery delays cost them approximately $200 million.
Compensation Progress
Despite the significant financial impact faced by United Airlines, Boeing seems to be making strides in fulfilling its compensation commitments. Earlier in April, Boeing disclosed that it had disbursed $160 million to Alaska Airlines as initial compensation for losses incurred due to the panel blowout incident and subsequent groundings.
United Airlines now joins Alaska Airlines as the second U.S. carrier lined up to receive compensation from Boeing, signaling the aircraft manufacturer’s efforts to address the fallout from these unfortunate events.
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