Key Takeaways
- United Airlines asked pilots to take unpaid leaves of absence following delays in deliveries of Boeing jetliners.
- The carrier explained that because of the lack of new planes, it won’t be able to fly as many hours as planned.
- Both United and Boeing have been plagued by safety issues recently.
Safety and production problems that have led to delivery delays at Boeing (BA) are affecting United Airlines Holdings (UAL).
The carrier has asked its pilots to take unpaid leaves of absence because the lack of new planes means its “forecasted block hours” for this year have been cut. United added in an email to Investopedia that it’s offering pilots “voluntary programs for the month of May to reduce excess staffing.”
United had contracted to receive 43 Boeing 737 MAX 8 and 34 Boeing 737 MAX 9 planes this year, but disclosed in a securities filing at the end of February it anticipated getting only 37 and 19 of them, respectively.
Boeing has been dealing with several issues, including a January midair incident in which a door plug on an Alaska Airlines (ALK) flight blew off. Last week, Boeing Chief Executive Officer (CEO) Dave Calhoun announced he would be stepping down at the end of the year as part of a broader management shakeup in the aftermath of the incident aboard the 737 Max 9 plane.
United has also faced its share of safety concerns, leading the Federal Aviation Administration (FAA) to announce last week that it was increasing oversight of the airline. Regulators added that while certification of Boeing planes in process could be allowed to continue, future projects may be delayed depending on what might be discovered by that oversight.
Shares of Boeing fell 1.5% to $190.01 around 1:50 p.m. ET Monday, while United Airlines Holdings ticked 0.15% higher to $47.95. For the year, Boeing shares are down about 22%, while United stock is up 16%.
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