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United and Alaska Airlines Face Financial Strain from Boeing 737 Max 9 Groundings

The grounding of Boeing 737 Max 9 aircraft has led to significant financial losses for United and Alaska Airlines, impacting their quarterly earnings and operational strategies.

A United Airlines Boeing 787 approaches for landing in Lisbon, Sept. 2, 2023, with the setting moon in the background. United Airlines reports their earnings on Tuesday, april 16, 2024. (AP Photo/Armando Franca, File)
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Passengers check in for United Airlines flights at O'Hare International Airport in January. The airline said the grounding of its fleet of Boeing 737 Max 9 jets due to the blowout of a door plug on an Alaska Airlines flight cost it $200 million.
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Overview

  • United Airlines reported a $200 million loss due to the grounding, significantly affecting its first-quarter earnings.
  • Alaska Airlines received $160 million in initial compensation from Boeing, with expectations for additional payments.
  • Both airlines have adjusted their fleet strategies, with United reducing its Boeing orders and increasing Airbus leases.
  • The FAA's increased scrutiny of Boeing's manufacturing processes has delayed aircraft deliveries, compounding the airlines' challenges.
  • Boeing is compensating affected airlines and revising safety protocols in response to the incidents and regulatory reviews.