Airline CEOs Express Frustration With Boeing's Failures: 'This Isn't New'

Zinger Key Points
  • “I think the Max 9 grounding is probably the straw that broke the camel’s back for us,” said United Airlines CEO Scott Kirby.
  • United forecasts that it will report a first quarter loss in the range of $116 million to $262 million.

Boeing Company BA shares have had a down week after the Federal Aviation Administration (FAA) barred Boeing from expanding production of its 737 Max jets late Wednesday. Airlines are forecasting losses resulting from the fallout, and executives are speaking out about Boeing's quality control and manufacturing issues. 

Airlines React: United Airlines Holdings, Inc. UAL CEO Scott Kirby joined CNBC's "Squawk Box" on Tuesday and expressed his frustration. 

"I'm disappointed that… this keeps happening at Boeing. This isn't new," said Kirby. "We need Boeing to succeed. But they've been having these consistent manufacturing challenges. They need to take action here."

United operates 79 Max 9 jets, the most of any airline, and now expects its fleet of Boeing Max 9s to remain grounded through the end of January. The company forecasts that it will report a first quarter loss in the range of $116 million to $262 million.

United also has orders for 277 of Boeing’s 737 Max 10 aircraft, with options to buy an additional 200, but the airline is making other plans. 

"I think the Max 9 grounding is probably the straw that broke the camel's back for us," said Kirby. "We're going to build a plan that doesn't have the Max 10 in it."

American Airlines Group, Inc. AAL CEO Robert Isom appeared on CNBC's "Squawk Box" Thursday and echoed similar concerns with Boeing.

"It's not acceptable. We have 120,000 team members who are doing a fantastic job of running the most reliable airline in the business over the last 18 months, and we don't need the distraction," said Isom. "We need them to produce a quality product every time … We need everyone at Boeing getting their act together."

Related News: Why Spirit Aerosystems Stock Is Climbing

Southwest Airlines Company LUV CEO Bob Jordan appeared on CNBC's "Squawk on the Street" on Thursday and shared a more supportive message regarding the troubles at Boeing. 

"We support the work with the FAA, the FAA oversight, because at the end of the day it's going to make Boeing a better company. It's going to improve quality, and Boeing being a better company is really good for Southwest Airlines," Jordan said. 

Boeing Responds: Boeing released a statement on Tuesday addressing the airlines' frustrations. 

"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," stated Stan Deal, CEO of Boeing Commercial Airplanes. 

BA, UAL, AAL, LUV Price Action: According to Benzinga Pro, Boeing shares were up 1.4% to $204.69, United Airlines shares were down 0.9% to $42.54, American Airlines shares were trading 1.8% lower at $15.08 and Southwest shares had dropped 1.7% to $29.86 at the time of publication Friday.

Photo: Shutterstock

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