United Airlines CEO says the airline will consider alternatives to Boeing's next airplane
United Airlines CEO says the airline will consider alternatives to Boeing's next airplane
United Airlines CEO says the airline will consider alternatives to Boeing's next airplane
The United Airlines CEO says he is “disappointed” in ongoing manufacturing problems at Boeing that have led to the grounding of dozens of United jetliners, and the airline will consider alternatives to buying a future, larger version of the Boeing 737 Max.
United Airlines CEO Scott Kirby said Tuesday that Boeing needs “real action” to restore its previous reputation for quality.
Kirby’s comments came one day after United disclosed that it expects to lose money in the first three months of this year because of the grounding of its Boeing 737 Max 9 jets.
United has 79 of those planes, which federal regulators grounded more than two weeks ago after a panel blew out of an Alaska Airlines Max 9 in midflight, leaving a gaping hole in the plane. Investigators are probing whether bolts that help hold the panel in place were missing or broke off.
Alternative? Thanks to capitalism creating monopolies, there are 2 viable companies that manufacture commercial airplanes. Boeing and Airbus. That's it. Pick your poison.
For medium sized airplanes there's Embraer.
Embraer's largest plane the 195-E2 fits 146 in an all economy configuration. Boeing's smallest plane the 737 max 7 has an all economy configuration capacity of 172. Embraer just doesnt make a plane in the same class as Boeing or airbus.
Believe it or not, this consolidation is almost certainly because of (good) regulation not capitalism.
The costs of building a new air frame are gigantic - the regulatory aspect in all countries is also gigantic. The barriers to entry are gargantuan - and the scale you need to be profitable is extreme.
But those regulations save lives. But they also keep competitors out.
Believe it or not, but companies outside of Boeing and Airbus are capable of designing airplanes.
It's not just "good" regulation holding them back either - in 2017 Boeing accused Bombardier of "dumping" some CSeries planes because they sold them to Delta at below the retail cost (about a 30% discount). The CSeries was/is a good plane, but took an incredibly long time to get through certification so Bombardier had been losing money and was desperate to sell them. Boeing complained about this discount to the US International Trade Commission who imposed a massive fine on Bombardier. Because of the delays, Bombardier couldn't afford to fight the fine so they ended up having to give up a 50% stake in the design to Airbus for only $1. The year after, the fines were appealed and overturned, but the damage was already done. Bombardier has since completely sold their stake in the CSeries (one less competitor), and Airbus gets the renamed A220 series for a massive discount.
As an aside, I can't argue that the FAA doesn't do more good than harm in this space generally, but I'm the last ~5 years it's becoming clear to me that they have a massive blindspot for Boeing in particular.
The Embraer E195-E2, Comac C919, and Irkut MC-21 are three non Boeing/Airbus planes that directly compete with the 737, and are currently being produced.
There is a duopoly in the larger aircraft. But narrow body jets are a pretty competitive market at the moment, despite the huge costs of aircraft development.
There are also smaller ones like Embrauer and Bombardier.
Airlines live off of equipment depreciation. They are taxed less on their airframes age. Considering that, US taxpayers make up for that shortfall I would rather that US carriers buy US made airframes built by US workers. So, Boeing would be my pick.