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14-03-2024
WASHINGTON: US air carriers warned on Tuesday that their plans to increase capacity were in doubt due to more jet delivery delays from Boeing (BA.N), opens new tab, as the hit to the airline industry from the planemaker’s safety crisis worsens.
The airline industry has cut expectations for deliveries this year due to Boeing’s problems, complicating efforts to meet record travel demand.
Boeing has been under heavy regulatory scrutiny following a harrowing Jan. 5 Alaska Airlines (ALK.N), opens new tab mid-air panel blowout that led to probes into the company’s safety and quality standards in its production process.
“Boeing deliveries are going to be way behind this year,” United Airlines (UAL.O), opens new tab CEO Scott Kirby said at a conference adding that it was “impossible to say when MAX 10 is going to get certified.”
United’s shares closed 1.7% lower, while Southwest Airlines (LUV.N), opens new tab shares plunged nearly 15% after it cut its Boeing delivery forecast for the year. Boeing shares closed 4.3% lower, having fallen 29% since the start of the year.
The National Transportation Safety Board said on Tuesday that it would hold a public investigative hearing into the Alaska Airlines incident on Aug. 6-7.
NTSB Chair Jennifer Homendy told Reuters last week the hearing would include testimony from employees at Boeing and fuselage manufacturer Spirit AeroSystems (SPR.N), opens new tab and others like Alaska Airlines.
The carrier confirmed a New York Times report on Tuesday that the MAX 9 involved in the incident had been scheduled for maintenance later on Jan. 5 after pressurization warning lights had come on during three prior flights, leading it to refrain from long trips over water on the aircraft.
“It was not deferred or overdue maintenance. It was simply scheduled for the 5th,” Alaska Airlines said.
After the Alaska Airlines incident, the Federal Aviation Administration curbed Boeing’s plans to expand 737 production, and the certification of the MAX 7 and 10 models has been further delayed by design changes.
Earlier this year, United said it was going to build a fleet plan excluding the MAX 10, the largest model.
Rival Southwest, the biggest customer for the smaller MAX 7, said on Tuesday it expects 42% fewer MAX deliveries this year from Boeing than previously estimated, and that will likely result in a cut in its 2024 capacity.
It is the second time Southwest cut its delivery forecast this year.
Boeing has advised southwest to expect 46 jets in 2024, all of which will be the MAX 8 variant, down from the previous expectation of 79 jets, which included the MAX 7 version, the airline said in a filing on Tuesday.
The deliveries will not include MAX 7, which is delayed and still waiting for a FAA certification. Southwest had previously expected 21 MAX 7 jets this year. (Int’l News Desk)
