United Airlines CEO Scott Kirby has reportedly lost confidence in Boeing. United has nearly 400 Boeing 737 MAX and has 150 Boeing 787s currently on order. They currently operate over 600 Boeing aircraft including Boeing 737 MAX 9s that are currently grounded.
Kirby is apparently seeking management changes at Boeing,
Scott Kirby has been venting his frustrations with management to colleagues and voicing his concerns over the handling of the Max grounding, according to people familiar with the matter.
Kirby has stopped short of a direct appeal for change to Boeing’s top brass, while seeking to enlist support to revamp management from a range of parties
United Airlines Boeing 737 MAX 9, credit: United
Bloomberg reporting on Kirby’s discussions also notes that the federal government is influential here but caveats,
The Transportation Department doesn’t have legal authority to dictate any changes to Boeing’s leadership, although it can take enforcement actions or other high-profile steps against the company.
The Biden Administration doesn’t need ‘legal authority’ to tell Boeing their CEO (or others) need to leave:
- The U.S. federal government spent over $17 billion with Boeing in 2022.
- The government decides what foreign governments they can sell to.
- And the government inspects and signs off on their commercial projects.
Boeing as a standalone aircraft manufacturer was created by the federal government’s anti-trust policy. United Airlines (then United Air Transport), Sikorsky, and Pratt & Whitney were all part of Boeing before the federal government broke them up.
Contracts can be put on hold. Inspectors can be sent in to delay. Paperwork can get held up. Boeing has an aggressive lobbying team. They’ve been in contact with every Member of Congress since the Boeing 737 MAX 9 grounding.
There was $17 billion in the pandemic CARES Act set aside for Boeing that they did not even take. Nonetheless, the company’s luster has worn somewhat off on Capitol Hill after a series of high profile incidents.
The phone call doesn’t have to come from President Biden. It might be Pete Buttigieg or Senate Armed Services Committee Chairman Jack Reed (D-RI). But if the Administration decides Boeing’s CEO needs to go, it really is up to them.
Wow. That’s all I have to say….
The last body qualified to select Boeing management is the government. That will just change the bureaucrat in charge of the problems, not fix them. Boeing’s shareholders are the group with the right and capability to choose new management. United should stop bitching to get bigger discounts and deal with its own problems. Remember what they did to Dr. David Dao when they relocated him.
@L3…It’s the stockholders that upper management was trying to please by cutting costs. Before all this, it was the engineers that had influence.
This would certainly have more credible impact if not coming from Scott “Drag Queen” Kirby…
Years ago, when I first started flying, I heard that Mr. Gordon Bethune had a very special relationship with Boeing. His company, Continental Airlines only flew Boeing aircrafts. I guess Kirby does not like Boeing that much.
Biden would love to force out a leader of private industry.
It’s part of the democrat move to actual facism.
Like blocking president Trump from the ballot.
Anti-democracy is what the democrats are.
You want action? Get Pete Buttigieg on the horn.
Love to see the boilerplate anti-government rhetoric on comment here.
Government wouldn’t have to “select Boeing management”,
That would be the boards job.
That said it would be much more interesting to hear why on earth you think the current Boeing management should stay.
Kirby is the problem. Just look at his record
Thank you, EgE.
Kirby’s United NEXT plan is built around massive growth using Boeing MAXs which was never going to happen at the rate UA expected.
Despite DL’s weak outlook, DL still earned $2 billion more in 2023, spent less on fuel and salaries, and generated $4 billion more in revenue.
UA is now burning cash while AA and DL are generating positive cash flow – exactly as I said would happen as their massive deliveries accelerated – which has not translated into industry-leading revenues.
Scott Kirby needs someone to blame. Boeing had nothing to do with UA’s 4th quarter earnings being so much weaker than DL’s.
Let’s see what AA and WN report but it is a given that in the first quarter of 2024, AA, DL and WN will all see stronger earnings due to the MAX 9 groundings at AS and UA.
Kirby should go. If he does not have confidence in his company’s main product and United cannot change it’s main product immediately, he has to go before he makes more bad decisions. Calhoun should also go as should Minicucci.
Both UA and AS management made bonehead moves not to diversify with more Airbus jets and now they are stuck with the awful MAX product that no consumer wants to fly.
The solution is to fire Kirby and place orders with Airbus. Boeing will defenestrate managers as soon as they lose more biz.
I agree
Gary : railing against big guvmint a few days back
Also Gary : Guvmint should make a call to Boeing
Whump, whump. Kirby bought the dog of a plane called the Max, when he could’ve bought something else. He owns it and should stop blaming others. Same with Minicucci.
The year is 2034. An asteroid the size of Slovenia is careening toward Earth and is set to destroy life on this planet as we know it. People around the world are huddled with their loved ones, if only to minimize the despair of humanity’s final days. Gary Leff is no different. With no reason for anyone to use their miles, he’s not posted on this blog in weeks. Yet on the last article published on View From the Wing, life continues: Tim Dunn is telling anyone who will listen (read: nobody) that actually, mankind’s doom only further confirms Delta’s dominance in the airline industry.
Dan
Tough news month
Clearly
Life will go on
Tim, I hope you know that even amongst the executives at DL, you’re the laughing stock of the industry. If Boeing fails, American aircraft manufacturing fails, and no one should be rooting for that.
bob,
1. I am hardly an executive esp. of Delta.
2. I am not rooting for Boeing’s demise – quite the opposite – but Airbus is doing a far better job of delivering what it promises even while United heavily put its faith in Boeing.
3. United and esp. Scott Kirby has laid out aggressive expansion plans that were unrealistic even before the MAX 9 grounding.
United will grow but nowhere near at the rate that Kirby has pushed.
Delta – the world’s only PERFECT airline. – And any aviation related company whose name isn’t “Delta” deserves to be liquidated. – That’s the impression one usually gets from reading Tim Dunn’s comments.
@747always – no normative claims were made in this post, I simply describe that Boeing is an artifact of the government and that the government has greater sway than anyone else over its future
Hard to know who to root for here: Kirby is a jerk in drag, Boeing’s C-suite is full of a bunch of pencil pushers who only want to kiss the butts of shareholders, and then there’s the most inept administration ever. I’d say that all 3 need to be ushered out the door by security.
I wish (but don’t think it will ever happen) that Delta, American & UAL would cancel all..ALL of their MAX orders. Surely Airbus has a competitor to the 737. This foolhardy train wreck with the 737 isn’t going to improve. I’ve said before, putting lipstick on a pig…it’s still a pig. Meanwhile, Airbus must ensure that they continue the high quality design and assembly process. Don’t slip into the Boeing mentality of “good enough”.
Tim,
While you do seem to enjoy going after United, it’s a bit ridiculous to blame Kirby for Boeing’s issues.
United Next is a fairly obvious plan for United to do what they’ve needed to do for a VERY long time: Grow domestically and have a robust domestic network more similar to AA and DL’s ability to route passengers in the US beyond United’s traditional international strength (I have to imagine this is why you go off on Kirby and United so much since a strong domestic United would be an enormous threat to Delta paired with United’s significantly larger international network than AA or DL). Of course United can do that now, but nowhere near the ability of American and Delta and United has good domestic hubs if they’re able to win against WN which, honestly, doesn’t seem that difficult when it’s the same airport (DEN). Southwest is a great airline, but struggles to compete successfully against large network carriers when push comes to shove (looking at ATL). Kirby wanted to grow with regional scope but ALPA wouldn’t allow it so United Next was the very obvious thing that pre-Kirby United never had the guts to do but what United so obviously needed.
Kirby has always been an Airbus guy, just look at US Airways (not really AA since he didn’t do that order). He inherited the Continental>United Boeing relationship at United but even with that, has ordered the airbus.
The MAX sure does seem to be having some issues and it will obviously hurt the MAX7 and MAX10 certification, it seems but that will also hurt Delta’s 100 Max10 orders so I wouldn’t too gleeful.
The growth timeline of United NEXT certainly isn’t unrealistic if you have a contract with Boeing or Airbus with delay penalties that are part of that. Did you expect United to lay out a growth plan inconsistent with their contractual order book?
Max,
once again, you fly off the handle w/o reading what I wrote.
I said that United and Scott Kirby was foolish to think they could build United NEXT heavily dependent on the MAX and that is exactly what is turning out to be the case.
Now that Kirby is saying that they are developing plans that don’t include the MAX 10 which everyone is saying what I said the minute the AS incident happened that the MAX 7 and MAX 10 will be further delayed.
WN has been putting up w/ delays on the MAX 7 for years and it was foolish for Kirby to think that he would get his MAXs on time, esp. given that Boeing has to certify the MAX 7, 10 and 777X and the FAA is all over Boeing right now.
Of course United needs to fix its structural problems including its pretty small domestic network compared to AA, DL and WN.
And UA’s big international strategy does not generate more revenues or profits. now that DL and UA have reported their earnings for the 4th quarter and 2023, DL generated $4 billion more in revenue and $2 billion more in profits. UA spent more on fuel and salaries. This nonstop bragging about UA’s international network might be a point of pride but it isn’t delivering what matters to a business.
And given that UA employees get profit sharing, it should matter whether the company is as profitable as it can be.
And Delta IS now aggressively growing international again as I said they would. They planned on a return to major international demand growth in 2024 and they built their fleet plan around that. They have the planes coming in and keep adding to them.
And DL’s largely Airbus orders are being filled much closer to schedule than Boeing.
It wasn’t that long ago that people said they wouldn’t fly Airbus and now it is Boeing that people want to avoid.
My how times change.
UA will get its old mainline fleet and its massive fleet of 50 seat RJs replaced; they will just have to wait longer for it to happen than Scott Kirby wants.
He’ll now get to experience what WN has been putting up w/ for 5 years.
United needs to cancel whatever MAX aircraft haven’t yet been delivered and get in line for whatever A320 and additional A321 aircraft he can get.
Delta needs to look at that too.
Alaska? Ask them how “Proudly All Boeing” has worked out for them.
While most of what has been said is true, I would hasten to point out that Airbus is not without its own issues. Remember their NEO’s need engines to fly. And I would hasten to point out that Spirit builds many of their fuselages as well.
When you analyze all the facts and history, this downfall rests squarely on the shoulders of Phil Condit, the Boeing CEO who bought Macdonald Douglas (in jest, with Boeing’s money). He brought in the chief bean counter, Harry Stonecipher, and all his pencil pushing minions. He was a disciple of Jack Welch, who also spawned two additional Boeing CEO’s. Outsourced manufacturing, downsized workforce, and moved most of the 787 to SC, to avoid the unions. When the board, from top to bottom is replaced, and an engineering oriented CEO (like Alan Mullaly should have been brought aboard) takes over, long term change will happen.
Oh, and now we know the real reason Boeing most its HQ from Seattle to Chicago, and finally to D.C. area. They had to move close to the government. That’s how ass kissing works.
Alan Z,
given that you didn’t even spell McDonnell Douglas’ name right, I’m not sure you quite get the grasp of what is at stake.
Everyone in the world will find reasons to find fault w/ Boeing but the reality is that there is no single reason for Boeing’s problems just as there is never just a single reason for an accident but rather a cumulative series of mistakes.
Boeing can be fixed but airlines around the world are increasingly tired of their problems and the Boeing name is badly damaged and will take years to fix.
Some people used to mock Airbus but it long ago surpassed Boeing in the number of aircraft it can produce, overtook Boeing in the narrowbody segment, and is poised to significantly cut the advantage Boeing has in widebodies esp. as production rates for the A350 continue to grow and the inevitable further delays on the 777X grow.
“I said that United and Scott Kirby was foolish to think they could build United NEXT heavily dependent on the MAX and that is exactly what is turning out to be the case.”
Sure, Tim. United should’ve built a growth plan inconsistent with their order book and built a growth plan that forecasted a MAX10 certification delay… ok…
I guess there’s a reason you aren’t an executive at any airline and don’t work at an airline. United shouldn’t be in the business of forecasting aircraft certification delays. They should put delay penalties in binding contracts with Boeing, which they do…
When Mullaly was the CEO of Boeing, it was the quintessential American corporation that had the can do quality.
Oh Arturo
“When Mullaly was the CEO of Boeing, it was the quintessential American corporation that had the can do quality.”
What kind of bird brain are you? They didn’t promote him. So, he retired and became the CEO of Ford, and turned it around.
Max,
Boeing hasn’t delivered an airplane on time and with the real quality for decades. To think it would start now is beyond foolish for any airline.
For United to have put so much of its very aggressive growth plan in the hands of Boeing was beyond foolish.
And there are issues throughout the supply chain and have been for years, including for the GTF engine – which United chose for its A321NEOs so it could collect compensation from Pratt and Whitney for the PW4000 grounding of the 777s.
United is addicted to growth and has repeatedly chosen alternatives that give it the fastest growth at the lowest cost – and still has said it will have to take on debt in order to fund its massive growth.
This isn’t just about the MAX 10 but about UA’s very aggressive growth plan which has long been very vulnerable to disruption.
I don’t expect you or any of the rest of the United fan club or Scott Kirby himself to ever admit it but I was right and now you and others are coming unglued because I point out what everyone else could see a long time ago.
@Tim Dunn
Spelling MD wrong is not life threatening. On the other hand, when Phil Condit turned over (well, fired for misconduct) the company to Stonecipher, it was an absolutely pivotal moment for Boeing. This was then followed by the absolute hairbrained stunt of not bringing in Alan Mullaly (spelling OK for you), sealed their fate.
Yes, there are a million reasons for a million faults/incidents; but they ALL stemmed from one point: switching Boeing from an engineering driven company, to one run by the bean counters. Putting proper management and board members in place does not turn the company 180. Doing so will slow down, and reverse a trend that left unchecked at the top will finish off Boeing. Also, returning their HQ would be a smart move.
Tim, being retired and living in Malta, I usually fly on LH three or four times a year. Always on Airbus. While I lived in Seattle for 40 years, and closely followed the exploits of Boeing. Yet, I have always felt safe and comfortable on my Airbus flights. Boeing’s order for the Max with LH couldn’t have come at a worse time for Carsten Spohr.