After United Airlines’ CEO Nixes Max 10 Plans on CNBC, Boeing Announces a January 25th Quality Stand Down

To put it bluntly…today was another rough day for Boeing.

(Sheffield, U.K.) Boeing Co. (NYSE: BA) had, at the very least, another rough day in the continuing wake of the January 5th accident whereby a door blew off of an Alaska Airlines Boeing 737 Max 9 mid-flight — starting with remarks about disappointment in the company and reports of “alternative plans” to orders of Boeing’s forthcoming Max-10 from United Airlines (NASDAQ: UAL) CEO Scott Kirby on CNBC just after 7am EST this morning, and ending with plans for a “Quality Stand Down” for all of Boeing’s 737 factory teams in Renton, Washington this Thursday, January 25th.

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Photo of one of United Airlines’ Boeing 737-8 aircraft courtesy of United.

Kirby acknowledged in the CNBC interview that Boeing is now, at best, five years behind on the original planned delivery date of its Max-10 airplane, and that United has at this point started working on alternative plans.

“The Max-9 grounding is probably the straw that broke the camel’s back for us,” Kirby said. “We’re going to build an alternative plan that doesn’t have the Max-10 in it.”

United had previously planned to purchase 150 of Boeing’s forthcoming Max-10 airplanes. Kirby noted that Boeing came short on deliveries of 24 aircraft to United in 2023.

On Monday, January 22nd, United forecasted an adjusted first-quarter loss of between 35 cents and 85 cents a share due to the Federal Aviation Administration’s (FAA) grounding of Boeing 737 Max planes this month.

On January 9th, Boeing reported record earnings and one of its best sales years ever, and a backlog or orders that stood at 5,626 jets, up from 5,324 one year prior, according to CNN.

Addressing frustration from various airlines in a press release today, President and CEO of Boeing Commercial Airplanes Stan Deal said, “We have let down our airline customers and are deeply sorry for the significant disruption to them, their employees and their passengers. We are taking action on a comprehensive plan to bring these airplanes safely back to service and to improve our quality and delivery performance. We will follow the lead of the FAA and support our customers every step of the way.”

During Boeing’s planned “Quality Stand Down” in Renton, Washington this Thursday, January 25th, Boeing’s 737 production, delivery and support teams will pause for a day so that employees can take part in working sessions focused on quality, as part of a broader initiative of immediate actions initially shared by Deal on January 15th.

Over the next few weeks, Quality Stand Downs will take place at other factories and fabrication sites to include all of Boeing’s Airplane Programs.

“During the stand downs, teammates will participate in hands-on learning, reflection and collaboration to identify where quality and compliance can be improved and create actionable plans that will be tracked to closure,” read a statement from Boeing.

Boeing Co. (NYSE: BA) shares closed at $211.50 today, down 1.6% from yesterday's closing price of $214.93.  Shares are down about 15% from their January 5th price of $249.00.

United Airlines Holdings, Inc. (NASDAQ: UAL) shares closed at $40.49, up 5.31% from the previous closing price of $38.45.

** Not investment advice; The FLY Report is not a registered investment advisor.

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