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United Airlines CEO says the airline will consider alternatives to Boeing
- intunderflow 3y agoUS government tariffs on Airbus in 3, 2, 1...
- anotherhue 3y agoDAMAGE CONTROL means protect the stock price, not the passengers. Contrast "CEO says: Every plane is being completely inspected, every nut and bolt and nothing is more important to United than passenger safety and confidence."
- monkeynotes 3y agoSurely stock price is directly linked to demand from airlines, and airlines are successful because of customer confidence, convenience, and price. If an airline bails on Boeing because customers refuse to fly Boeing fleets, then damage control/stock price is an abstraction of passenger's requirements.
- tekla 3y ago[flagged]
- elromulous 3y agoThey do, but they are one of the biggest purchasers of the max.
- mfer 3y agoThe article points out that they have 79 planes from Boeing that are grounded. That it's impacting their ability to fly and finances. They may have Airbus planes but their whole fleet isn't Airbus.
- tekla 3y agoOk, so what is the point of the article title? > United Airlines CEO says the airline will consider alternatives to Boeing’s next airplane
- jonwachob91 3y agoWhat is the point of your comment about United exploring other options being meaningless b/c they operate a small percentage of airbus'? This article is signaling that operators are exploring alternatives to Boeing, and revenue could shift from Boeing to Airbus in the future. That's the point of the article.
- jonwachob91 3y ago> United already runs Airbus planes. Is different from moving away from Boeing planes... United is one of the largest operators of Boeing planes in the world, they have plenty of room to shed Boeing and purchase Airbus. United is the largest operator of 737 MAX 9s. They operate 80 MAX 8s, with another 50 ordered. They have ordered 150 MAX 10s (which have yet to be delivered nor begin operating). https://en.wikipedia.org/wiki/United_Airlines_fleet https://en.wikipedia.org/wiki/United_Airlines_fleet
- deleted 3y ago[deleted]
- lamontcg 3y ago> Worthless article. Annoying binary black and white thinking. United can shift the Boeing/Airbus tilt in their fleet towards Airbus going forward. The fact that United already has some Airbus isn't the "gotcha" you think it is. Yeah, I already knew that factoid.
- lainga 3y ago"Kirby wasn’t specific about what planes the airline could acquire instead of the Max 10, but he noted that there is only one other global manufacturer of such large planes — Boeing’s European rival Airbus." Is it just me or is every player in the dramatis personae dancing around this and/or burying the lede? If they were ordering regional jets, sure, you could buy Embraer or Bombardier, I guess. But as it stands it's like everyone's saying "we're considering alternatives to turning left"
- justapassenger 3y agoBombardier is out of passenger jet business - they sold it to Airbus and now they focus exclusively on business jets.
- consumer451 3y agoI think this is a major shot across the bow of Boeing management. To me, the fact that there really aren't timely alternatives doesn't take away from the gravity of a major airline CEO saying this.
- baby_souffle 3y ago> I think this is a major shot across the bow of Boeing management. > To me, the fact that there really aren't timely alternatives doesn't take away from the gravity of a major airline CEO saying this. What's to worry about? United has no real alternatives. A shot across the bow implies that the next shot will be with intent to kill but united is stuck with boeing for at least a decade....
- consumer451 3y agoI don't mean that the next shot would kill Boeing orders, I mean it would kill (dethrone) Boeing management.
- icegreentea2 3y agoWhat? United does have some alternatives. I thought the article was quite clear that United was considering/planning on cancelling their MAX 10 orders. Sure, United might still be flying a bunch of Boeings, and maybe some other orders might still go through, but there are alternatives for United.
- eitally 3y agoActions have consequences. Boeing decided they wanted to focus on maximizing profits rather than allowing organic growth to follow on continued high quality engineering and services. In regulated industries, especially where safety is of utmost importance, this is exceptionally risky. They F'd around and found out, and imho the only solution is leadership and strategy changes to shrink their business and refocus on becoming an engineering-led firm cranking out superior products & services. If we're being honest, I think the same is true of Google/Alphabet.
- fred_is_fred 3y agoThey also have a captive market which is why they can get away with this. Switching plane manufacturers is a long process around pilot and maintenance retraining. Additionally orders for planes go out years and years in advance and you can't just call Airbus and ask for new planes next week. I think it's inevitable consequence of no competition in the market. Boeing is the stadium food of planes, poor quality & expensive, but if you're hungry you still eat it.
- WanderPanda 3y agoThey didn‘t maximize profits at all. Why do people operate on the principle „if it is bad it had to be because of maximizing profits“? This seems to be much more about corruption and misaligned incentives as well as bigcorp bullshit-job rot. There is really only one thing that can cure this and that is more fierce competition
- waterhouse 3y ago"Maximizing short-term profits (by cutting costs)" would be more accurate, and yeah, that is a misaligned incentive.
- csours 3y agoYou're not wrong, but I would say it differently - the C suite has been focused on financialization - how to make their operations more tax efficient and make their SEC filings and shareholder meetings look good. So they spin off core manufacturing to a supplier and then squeeze them for pennies instead of concentrating on operational excellence and quality. They whip their test engineers until they pass a product instead of learning lessons. etc etc. Yes, this is all about incentives.
- zwieback 3y agoOther than Airbus, are there any alternatives?
- goenning 3y agoEmbraer
- pdonis 3y agoNot for planes the size of a 737.
- WanderPanda 3y agoWhy don‘t they scale up? They seem to have all the regulatory capabilities to get a commercial jet on the market already. I also never understood why e.g. China doesnm‘t just buy Embraer (or take over all their employees) and builds out from a functioning product?
- oldpersonintx 3y ago[dead]
- icegreentea2 3y agoScaling up would be hard. I think the E2 is a 4 seat across aircraft. It's maximum capacity configuration is already quite long (42m) with ~120-150 seats. A320 is like 38m long with ~200 seats (6 seat across). Scaling into the A320/737 range would need a brand new design with wider fuselage probably. I'm not saying that Embraer could not do that, but sticking with the E2/A220 size range seems to be a winning combo - until recently (A220), they had no real competition from the big two. Maybe with the more recent weakness from Boeing, Embraer might want to consider a 737/A320 class design, but these things take time. Also, as much as BRICs is a thing, I don't think Brazil would be too fond of selling Embraer to China.
- theYipster 3y ago
- SirensOfTitan 3y agoAt this point, it’s quite pertinent how many corners Boeing has cut over and over again—the company’s culture and management is obviously poisonous. I’m probably a minority of folks, but at this point I’m flying on airlines with the fewest Boeing Max generation planes in their fleet. I also don’t really trust the FAA to properly regulate Boeing after years of a close relationship—the recent groundings are the bare minimum.
- rehitman 3y agoI haven't tried to avoid MAX, but I have two friends who tried very hard to change flights or only get flights that are not MAX. So you are not alone. You just need to spend more money and time
- HappySweeney 3y agoI tried this, but they just switched planes on me last minute.
- rightbyte 3y agoIt is somewhat sad to see. Like, I don't see how modern manager culture of punishing loyalty, high worker attrition, short term profits, etc, can turn Boeing around. Once the elite got rotten they need to be ousted, and the workers don't care (why would they?) and most shareholders have a voters' dilemma of caring at all due to too low stakes. The only ones that care and can do something is the government, congress etc. Boeing need to be split up and sold off, and the management fired. But I don't see that happening anytime soon.
- kilroy123 3y agoI fly a lot, way more than the average person. I try to avoid the 737-Max, but I'm rather picky about which aircraft I want to fly on.
- anderber 3y agoWhat airplanes do you like flying on? Just out of curiosity.
- fred_is_fred 3y agoA better question is what will Southwest Airlines do? They exclusively run 737s as I understand it and they effectively have no choice here to beta test Boeing's garbage. I think United CEO's comment is at best a renegotiation attempt.
- thot_experiment 3y agoBoeing's garbage is at least partially a direct result of Southwest being unwilling to accept a change in type rating for the new 737.
- icegreentea2 3y agoNo, Boeing's garbage is a result of shit tier engineering and maybe their own lack of confidence. Southwest had a challenging customer requirement to hit, and Boeing failed to deliver. Consider if Boeing refused to build the MAX to be type rating identical. Southwest would -have- to buy and retrain. Sure, maybe Southwest would go to Airbus to spite Boeing, but I don't think that would happen if Boeing provided a better product. Airlines typically aren't that petty about these types of strategic decisions. The MCAS fix themselves showed that MCAS wasn't fundamentally a bad idea - just that they had awful implementation (use both AOA sensors? Fail-safe if AOA sensors disagree? Provide proper limits and overrides?). And now after the entire kurfuffle and fixes, 737 MAX still has the same type rating as 737 NG in USA, Canada and Europe (that's just the ones that I checked). MCAS and 737 MAX could have been a home run.
- paxys 3y ago> alternatives to Boeing So, Airbus?
- tazjin 3y agoWell, an American company isn't going to start buying Sukhoi planes ;)
- akprasad 3y agoAlso Embraer [1]. https://en.wikipedia.org/wiki/Embraer https://en.wikipedia.org/wiki/Embraer
- switch007 3y agoHow so? They are mostly focussed on smaller capacity aircraft. They practically seem niche compared to Airbus and Boeing. Though personally I would love a world full of E190s in a nice comfy configuration.
- lsllc 3y agoEmbraer and Bombardier for smaller aircraft.
- Almondsetat 3y agoCan they ramp up production?
- 3y ago
- adrr 3y agoBoeing should move the its HQ back to Washington state. They need to show the public that things are going to change and it starts with the executive team being next to the engineers. Microsoft had the same problem when Balmer was in charge, focus around sales and not engineering.
- bhewes 3y agoYeah once the C-Suite escaped to Chicago it went downhill fast. Ivory tower thinking is also a problem in Corporate America.
- ironmagma 3y agoThat would require recognition that something is wrong.
- upon_drumhead 3y agoAre there many engineers left in Washington state? I thought they were shutting down the entire Washington state operation?
- brightball 3y agoThat has never been in the plans that I know of. IIRC rumors like that were used as a scare tactic to stir up union pressure. My cab driver told me that when I was out there in 2011 and Boeing was getting ready to open their South Carolina facility.
- klardotsh 3y agoThere are flocks of *at least* mechanical and software engineers in Everett (and I think maybe Renton, too) - source: many of them are my friends.
- gumby 3y ago> Boeing should move the its HQ back to Washington state...Microsoft had the same problem when Balmer was in charge, focus around sales and not engineering. While Balmer was CEO the HQ was in Washington state :-) More seriously, Balmer is an excellent example, because I believe the Boeing case is more mendacious, yet more banal. Balmer seemed to have the right idea, yet utterly the wrong intuition. It's especially strange in that he was there pretty much from the very beginning, and influenced the growth of the business, yet fatally he never learned what the business actually was. When Balmer took over MS, the business rested on several pillars: 1 - A captive client base based on CIOs and IT departments 2 - A dedicated and committed employee base 3 - A huge army of outside developers who benefited when MS succeeded, so helped the latter happen. 4 - A consumer business ultimately driven by the size of #1 He was over focused on #1 (in the classic "The Innovator's Dilemma" style) which is why the iphone not only nuked their phone business but opened up a BYOD movement which eroded IT's power (ironically Apple had done the same with the Apple II+Visicalc, which Microsoft shrewedly took advantage of and rode to domination...while Balmer was there). 2 - Picayune things like replacing free snacks with vending machines told the staff that he didn't give a shit about them, rather thought of them simply like a resource. You can see from the "developers developers developers" video that he really did value #3, and much as I dislike him as a businessman I loved him for that. But eventually it became clear he understood its importance to the business but didn't understand why. 4 - this pillar flailed due to neglect under him, including Xbox, Skype etc. He grew up with the car business, but grew up when the industry was in the shitter, surviving on momentum, and got his MBA in the intellectually (in regards to business) terrible 1970s. He appears to have learned nothing from his long time at MS before becoming CEO and ran the business like a shitty 1970s car company. Note that the US car industry only got its act together after 1 - getting their clock cleaned and 2 - going back having gearheads as CEOs. The Boeing case is similar, but worse. I never believed that Ballmer was subject to lazy or misaligned incentives; he was simply wrongheaded. I do thing the MCDD guys who took over Boeing were incentivised by their comp plans to optimize for the wrong things, all in the short term. The same thing destroyed HP.
- cpt100 3y ago[flagged]
- cft 3y ago"Shares of The Boeing Co. fell less than 1%." They are too big to fail. So they will fail together with the entire state. 4 domestic aircraft manufacturers of the 1960s (Lockheed, Douglas, Convair, Boeing) is now one.
- jonwachob91 3y agoBoeing is already down 19% for the month - on news of the latest MAX issues. Investors have already hit the stock hard, and an operator saying they'll think about other options won't move the needle in the face of the REAL news that has already hurt the stock. If United announces they are cancelling their 200 Max 10 and Max 8s on order, then you can expect to see the stock dip further.
- Dalewyn 3y ago>If United announces they are cancelling their 200 Max 10 and Max 8s on order, then you can expect to see the stock dip further. Seeing as the CEO stated they are "going to at least build a plan that doesn’t have the Max 10 in it", they damn well better follow through and cancel those MAX 10 orders. Words are supposed to have meanings, after all.
- netrus 3y agoStocks can fall quite a bit before a company fails. Aviation is full of companies with huge revenue and tiny profits/valuations.
- ApolloFortyNine 3y agoI mean it would be dumb not too, there was no reason to say anything else. Since the company actively runs Airbus planes already it's not even as if there's a barrier to entry there. Even if they had no intention of cancelling any ongoing orders, it'd be ridiculous to not strive for some compensation with this current Boeing hostile climate.
- monkeynotes 3y agoI didn't mind flying on a 737 Max once they figured out the MCAS stuff, but now I see it's an institutional problem I don't know if I could accept a ticket on a Boeing aircraft manufactured in the past ~10 years.
- dboreham 3y agoThis kind of enshitification is ultimately an emergent property of public market ownership. You can see the result of a controlled experiment by eating at McDonalds then at In-n-out Burger (one is public, the other private). I'd include PE under the public ownership category, despite the name.
- asylteltine 3y agoIn and out is SO overrated. Their burgers were meh and the fries were dry as hell. I would rather eat at McDonald’s any day of the week. Public ownership is great and doesn’t necessarily lead to shitty products.
- wolverine876 3y agoBoeing has been owned by the public market for a long time?
- JCM9 3y agoThis whole fiasco represents a leadership f$&* up of existential scale. A lot of this started when Boeing moved its HQ away from a core production hub. Leaders tucked way in offices make a lot worse decisions than leaders close to the literal nuts and bolts of a company. Boeing’s reputation was on the quality of its engineering and production. “If it ain’t Boeing I ain’t going” was a real phrase. The current Boeing leadership has turned the company’s image of quality into the punchline of bad jokes. The only viable fix is a serious reset and sacking of most of the senior ranks to bring leadership back that understands the difference between short term profit and long term gain. This has all been sad to watch, but the flying public deserves better.
- anuptalwalkar 3y ago> leaders tucked away in offices make a lot worse decisions than leaders close to nuts and bolts… Does this the argument applies to this current ‘Return to office’ movement?
- a-priori 3y agoIt's not about physical distance but social distance, i.e who talks to whom, and how many degrees of separation there is there between who's making the decisions and who's doing the company's core work (for Boeing that's building & designing planes). In a company with offices, social networks will mirror the physical layout because people will tend to talk to people nearby them in the building and not people in different buildings. By moving management further away physically, they also moved them further away socially. But in a fully remote company it's not so clear, and more about the org chart and who's in the same Slack/Teams rooms or meetings.
- deleted 3y ago[deleted]
- otikik 3y ago"We want a discount"
- JCM9 3y agoAlso for historical context, United traces its name back to Boeing itself. “United Air and Transport Corporation” was a company that came out of operations founded by Mr Boeing. Thus for anyone that knows their aviation industry history, United saying they’ve lost faith in Boeing airplanes is a big ouch.
- Dalewyn 3y agoNot only that, United Airlines is the de facto US flag carrier (to Delta's chagrin, probably). This is a big ouch in so many ways.
- balozi 3y agoTry as I might, I cannot see any upside for an airline chief executive to make this kind of statements publicly. Sometimes a CEO needs to know that they don't have to publicly announce their internal deliberations. Well...unless he was drunk when interviewed, or wanted to divert attention from bad financial results, or both.
- fellin 3y ago1. Distancing themselves from Boeing 2. Managing fallout from obvious losses from groundings 3. Showing investors that they can continue without Boeing should it regress further. 4. Kicking off bidding war between Boeing and Airbus. Boeing will give them an insanely good deal, especially if they announce their PO soon. Airbus is obviously also very keen on getting a foot in the door with United. 5. Sending a message to Boeing that they have had enough of this shit and it will really hit the fan if they don't get their act together.
- theYipster 3y agoAlso… - showing his employees and the public where the blame belongs. No doubt United has some angry passengers given the flights they had to cancel due to the grounding of their Max 9 fleet. Also consider SNL’s sketch about Alaska… airline execs over there are no doubt fuming at Boeing.
- aml702 3y ago[dead]
- jeroen79 3y agoBoeing should of just created a new plane with all the required development/testing instead of trying to take the MAX shortcut.
- lamontcg 3y agoThat has nothing at all to do with the window panel blowout though
- pie420 3y agoit has everything to do with it. the current issues are a symptom of shortcuts and cost cutting at the expense of long-term growth and continued success. 737 MAX MCAS was the result of MBAs cutting costs when the right thing was to spend more and develop a new plane. Aircraft doors blowing open mid-flight is the result of MBAs cutting costs and outsourcing safety device manufacturing and install to ultra-cheap low quality vendors like malaysian spirit aerosystems.
- lamontcg 3y agoBut "just create a new plane instead of the MAX" doesn't address the other deficiencies that you point out. Spirit would be just as shitty at putting together 737-900s as 737-MAX9's (and in fact they're finding QC issues in 737-900s now)
- observer987 3y agoI'm really disgusted at what's happened at Boeing over the years to lead to this situation. But it's systemic in the boardrooms across the country that profits come before anything else. In a more ideal world, the people in management responsible for this mess would be brought up on criminal charges and forced to disgorge their performance-based pay that was based on fraudulent practices that harmed passengers, the workers of the company, and the economic growth of the USA. But, I'm afraid the best we can hope for is civil lawsuits brought by shareholders that will settle for a fraction of the economic damage wrought. Undoubtably the FAA will be increasing its scrutiny of the company. But that will probably fall by the wayside if the Republican Party regains control of the government. The decrepit management team will probably pursue a sale of the assets at fire sale prices so that they can prop up their stock price and retire to a golf courses in "anonymity".
- i_am_jl 3y ago"alternatives to Boeing" is a very strange typo for "Airbus".
- sandworm101 3y agoLol. Alternatives. UA isnt going to buy chinese aircraft. It is boeing or airbus, the one and only alternative at this scale.
- gr1zzlybe4r 3y agoThe airline that stands to lose the most with the downfall of Boeing is actually Southwest - whose fleet is entirely composed of 737s. Not MAX's yet, but that was at least the plan before more of these problems were exposed. I can't imagine how nervous the C-suite at Southwest is feeling. Also - I wonder if Boeing even has the capability to build a new commercial airliner from scratch. The 787 was insanely expensive and had its own problems (remember the burning batteries?).
- tyingq 3y ago> Not MAX's yet That's not correct. They have 220+ Max 8's in service.
- frellus 3y ago[flagged]
- xivzgrev 3y agoI’m happy to see this. Very disappointed that Boeing has let itself corrode to this stage so the consequences are starting to hit
- JCharante 3y agoI think companies should be punished by the free market. Actions should have consequences. Yes, thousands of flights and millions of people travel on Boeing aircraft without problems, but that doesn't mean you should continue to support companies who are careless when there's an equally viable option available (given that Airbus is a competitor to Boeing, Airbus has an alternative for every type of plane in Boeing's fleet)
- Log_out_ 3y agoBoeings military buisness is in for a nosedive to. It's in parts "allies" buying equipment as part of the package and another isolationist trumpel period will end that. Then there is the military, financed by lending and spending. And it doesn't lend from the American people, it lends from the we which does its trade in dollar and which will vote with its feet if the trade route protection falters and fails.
- wolverine876 3y agoThere's a dogma that regulation is de facto inefficient and bad generally, and I think it's almost universally accepted that that's the case for the self-interest of businesses. But like any dogma, any prejudice, it's wrong: Businesses have self-interest; it's overwhelming and they can't escape it and its biases (though they can and should moderate it, and some businesses do that much better than others). Regulation provides an independent, expert power structure with great value where self-interest, or multiple self-interests, fail. It allows competitors to coordinate; to act with enlightened self-interest and (gasp) in the public interest - lawlessness is bad for business. For example, in financial markets, unregulated self-interest leads to mountains of fraud, and a place where nobody wants to invest - that hurts everyone. A safe, fair marketplace attracts everyone. For airplane manufacturers, self-interest drives manufacturers to cut corners. If you've ever advocated against cutting corners because of an over-the-horizon, non-specific risk (meaning, the consequences won't be tomorrow, and we can't say exactly what and when they will be), you know that you are violating social norms and can be very unpopular. But if you can say, 'this violates FAA regulations', then it's a clear and specific risk.
- marcosdumay 3y agoHum... Regulators are inefficient. Regulations exist for stopping society from getting stuck into suboptimal Pareto equilibria. So you don't want regulators to do things that are not their minimum job, but anybody with a general argument against regulation is just trying to rob you.
- wolverine876 3y ago> Regulators are inefficient. What do you mean by that?
- marcosdumay 3y agoThe theory goes that the regulation organization has no reason to run at its best performance. Because it's necessarily a monopoly (works best when it's the government itself), and because there's a lot of pressure into its continued survival. So, as a rule, the work of regulators aren't optimized at all. Of course, the real world is much noisier than that. But the most that free market advocates can claim is that regulators are inefficient, never that regulations are. Unless they are talking about some specific regulation.
- erikig 3y agoThe headline is almost redundant. In a duopoly, every substantial client is always forced to consider the alternative.
- NikkiA 3y agoEmbraer exist for many of the short hop trips United also covers. edit: to add some elucidation, United operate 40 737-700s that they may consider replacing soon, the E195 would be an option against the A320 or 737-MAX7 options.
- seatac76 3y agoI wonder how this will play out in practice. Their reasons to ditch Boeing are valid. Airbus though has a decade long backlog for the A32x series. How are they going to get that many in time?
- anderber 3y agoDepending on how far they're willing to go, they could replace some with Embraer E195.
- prng2021 3y agoThere’s no “alternatives”. There’s “the alternative”, Airbus.
- tdiff 3y agoLooks like a chance for MC-21
- ramesh31 3y ago>And just when Boeing needed experienced employees the most, it suffered a brain drain. In late 2022 many Boeing engineers started heading for the door to lock in pension payouts (which could be hurt by rising interest rates) they had accumulated. When full airframe production returned after the pandemic, a lot of the talent didn’t. One thing I worry about with complex products like aircraft in general, is what if we just forget how to do this stuff correctly? I mean the entire aviation industry was built in a single human lifetime. All of this was conceived and designed by our parents and grandparents. There's really no guarantee or precedent whatsoever in human history for that kind of knowledge transfer to occur between generations. I've been plagued by this feeling my whole life, that our generation (millenials and below) simply might just not be up to the task of keeping things going. It feels like we're starting to see those cracks.
- detourdog 3y agoI think that Boeing is less than half the problem. The US-FAA has sold the whole country down the river with the lack of oversight. How that happened is the problem. We expect Boeing to try to draw outside the lines. The FAA helping them do that is the problem.
- xtracto 3y agoThis, I think this IS the real problem. In a capitalist society, there are markets that need to be heavily regulated. Health is one of them and aviation is another. Private companies are going to do what they are supposed to do: Maximize shareholder value. So they are going to cut corners, minimize spending and maximize returns by EVERY MEAN. It is the job of the regulator to establish strict regulations and ensure that they are followed; otherwise, to REALLY execute punishments. The fact that the FAA has been lax with Boeing is what has enabled them to cut corners to this point.
- detourdog 3y agoThe real tragedy is that so much of our design ideas around safety and human factors was first documented by the original aviation industry between. Everything went to shit and Eisenhower saw it happen right before his eyes. https://en.wikipedia.org/wiki/Military–industrial_complex https://en.wikipedia.org/wiki/Military–industrial_complex They basically let Boeing do whatever they want for National Security reasons.
- throwaway9238 3y agoShould've considered it sooner. Their problems didn't start with the door plug fault -- "Why is Boeing such a shitty corporation?" https://robertreich.substack.com/p/why-is-boeing-such-a-shitty-corporation https://robertreich.substack.com/p/why-is-boeing-such-a-shit...
- xenadu02 3y agoI wonder if Lockheed couldn't take a run at passenger airliners again. It would be nice to have a backup plan.