United Adroit in Limiting Max-related Flight Cancellations

 - April 17, 2019, 5:38 PM
United has skillfully used its resources to cancel far fewer flights than have rivals American and Southwest in the face of the 737 Max grounding. (Photo: United Airlines)

A combination of deferring voluntary maintenance and scheduling spare aircraft has enabled United Airlines to cancel far fewer flights to date as a result of the worldwide grounding of the Boeing 737 Max fleet, compares with its two major U.S.-based rivals whose fleets also include the new Boeing jets.

American Airlines has said it expects to cancel some 115 flights a day while its existing fleet of twenty-four 737 Max 8s is grounded. Southwest Airlines—which has 32 Max 8s in service—expects to cancel about 160 flights a day until the grounding is lifted. But United said on April 15 that it expects to cancel a total of only 130 flights in the month of April due to the grounding. United was operating fourteen 737 Maxes—all Max 9s—at the time of the March 13 worldwide grounding, but it was due to receive five more in the second quarter and take delivery of 11 in the third quarter.

Asked in United’s Wednesday first-quarter earnings conference call with financial analysts why its Max-related flight cancellation rate is so much lower than those of its U.S. competitors, Greg Hart, United’s chief operations officer, responded, “We took a little operational risk on using [spare aircraft], and we moved some hangar time around” to free up other aircraft types to operate most of United’s 737 Max schedule. For instance, he said, United is using Boeing 777s and 787s to operate Houston-Los Angeles and San Francisco-Maui flights for which 737 Max 9s were originally scheduled.

While Hart confirmed that finding replacement capacity for its Max 9s within the rest of its fleet means United in deferring heavy maintenance on some aircraft, he said all the deferred procedures represent “voluntary” maintenance. That includes adding Wi-Fi capability, repainting aircraft “and other voluntary maintenance [which] is perfectly able to be deferred,” added Hart. “No safety-related items” are affected.

United’s 737 Max grounding-mitigation strategy appears to have worked well to date. The carrier revealed during the conference call that it had even canceled 32 percent fewer flights during the first three months of 2019 than it did in the first quarter of 2018, despite encountering “challenging operational events” in the 2019 quarter. In addition to the 737 Max grounding, these included the need to suspend its Newark-Delhi service from February to July because of the closure of Pakistan’s airspace to India-bound flights. United canceled just 1,811 flights in the first quarter of 2019 compared with 2,664 in the comparable 2018 period.

However, United won’t able to continue minimizing 737 Max-related flight cancellations so effectively for more than another “month or two,” cautioned Hart. “Beyond that, it’s tough, because not many maintenance events” can be postponed any longer. Perhaps because of this, while American and Southwest have committed to removing the 737 Max from their flight schedules until the latter half of August, United has committed to voluntarily grounding its 737 Max fleet only until early July.

Asked if the 737 Max grounding is affecting United’s talks with its pilot union over a new labor contract, Hart replied, “No. It’s not hindering at all the ongoing negotiations. ALPA has been a great partner for us on the MAX issue… When it comes to safety, we work hand-in-glove with ALPA.” Hart also said, “Right now, we have no plans to add [additional] simulator training” to the regimen for United’s 737 Max pilots, “but, of course, if the regulatory authorities require that, we will comply with that request.”

Despite the grounding, United still expects to take delivery this year of all 16 additional 737 Max 9s it was originally due to receive in the second and third quarters of 2019, according to Gerry Laderman, United’s chief financial officer. However, while United originally had no 737 MAX deliveries scheduled for the fourth quarter, Laderman said that “we would expect some deliveries to slip to the fourth quarter” because of the grounding.