After a number of high profile incidents, the FAA has been auditing safety practices at United Airlines. They’ve been unable to open up flights to new cities or add new delivery aircraft to their fleet, and they have had to defer already-announced service.
There was some worry that this could drag on as the Department of Transportation’s Office of Inspector General announced an audit of the FAA’s audit.
Word on the street, though, from aviation watchdog JonNYC is that restrictions placed on United Airlines are being lifted by the FAA.
UA:
I’m hearing FAA operating certificate is being unfrozen, new aircraft can again be added to UA’s operating certificate.— JonNYC (@xJonNYC) May 16, 2024
After the door plug blew off an Alaska Airlines Boeing 737 MAX 9 while inflight in January, aviation safety has become focal. The smallest incidents have been magnified. And individual incidents have been stories in ways they haven’t been in the past – a new “Summer of the Shark” which was the third most covered story of 2001 prior to 9/11, even though shark attacks were actually down compared to the previous year.
United Airlines Boeing 737 MAX 9
An outsized number of these incidents seemed center around United Airlines (and they weren’t all on Boeing planes). The FAA had been criticized for lax oversight broadly. Usually they’ve come in after specific wrongdoing had been uncovered or reported by whistleblowers. One hopes that this effort has improved things even if there wasn’t a real problem relative to the industry (which is itself incredibly safe) to begin with. In fact to relax restrictions likely signals real confidence in the airline’s safety, because doing so being followed by an incident would reflect badly on the FAA.
Now, to be fair, the FAA should do the same oversight to Delta, American, and Southwest.
@ Gary — Let’s see, who’s most premium, now?! World’s biggest operator of POS 767s or world’s only operator of Polaris? Easiest choice EVER.
It would be interesting to know what, if any, changes were made to United operating procedures as a result of this audit. If no changes were made, then this was all theater. Are there still limits, like using FAA check rides to qualify certain pilot qualification upgrades? Has United changed any criteria used for awarding bonuses to management? Are there changed qualifications for promotion to captain? These are the things that show if the audit was successful or not.
I’ve watched similar activities related to quality and ISO audits in a non-related industry. While not a government audit, these audits had limited impacts on what we really did. The resulting online training courses rolled out company-wide had limited applicability. For example, I was never going to climb a cell tower or hire someone to do so, yet we all got to learn about the rules for safe operating at height. I was also never going to be in a position to bribe a foreign official, but I might get taken to dinner (and was) by a vendor.
In my experience, the quality processes were generally adequate, but the compliance to the processes was marginal, not completely abandoning them, but sometimes ignoring things that were inconvenient, when there were other business pressures. I would not be surprised if similar things happened at United, or any other airline, but I have no first-hand knowledge. Is there pressure to defer maintenance at American so flights get out on time? When an airlines metric is to get flights out on time, that’s the result which is prioritized. When the priority is to reduce deferred maintenance, the airline will hire more mechanics. If an airline’s priority is growth, it will buy planes and hire crew to operate them. Might it cut corners on having enough captains to operate them?
I see the same pressures at the FAA to increase the number of controllers. Who audits the FAA to monitor it’s procedures for approving new controllers to work independently are effective? One hopes it doesn’t have to be the NTSB.
Gene,
are you talking about the Polaris that:
1. took almost a decade to roll out because UA thought that having a single product across a fleet of 200 widebodies (something no other large global airline tries to do) makes sense?
2. Polaris that was never class-leading and still is not?
3. Polaris that doesn’t fit on the 767 in an economically viable configuration that you happily deride so UA destroyed the economics of the 767 in order to tout a product which doesn’t fit or make an economic difference
or
4. Polaris that couldn’t save UA’s finances across the Atlantic last year – where they made just 40% of what DL made despite flying far more capacity?
We all realize that you are motivated by emotion but actual facts show that UA DID NOT make the best business decisions with Polaris and continues to pay for it.
John H,
I suspect that UA actually did put procedures in place that other airlines have and UA didn’t bother to enforce and that is why UA had so many more incidents in such a short period of time.
There are and always will be underperforming employees but UA undoubtedly was not doing training and oversight of employees and procedures that other airlines do.
The FAA is less concerned about the inevitable incidents that come from a company as large as the big 4 but in the lack of oversight that allows those things to happen.
UA has, in fact, increased training and oversight esp. among pilots and mechanics and THAT is why the FAA is willing to remove the restrictions.
Add in that Boeing’s delivery delays mean that UA can’t grow near as fast as it wanted and the FAA growth restrictions weren’t doing much anyway
That explains whey they cut to Asian Pacific routes out of LAX. UA is still a mess dispite what they are trying to spin.
Tim, how many planes will DL be receiving this year compared to UA’s 60-ish? How many will DL be receiving next year compared to UA’s 100?
That doesn’t take into account the larger fleet of 757s and 767s with DL that need to be retired.
Even with reduced delivery rates, UA is still seeing significant growth.
Sunviking, UA is adding two new daily year round routes from LAX, the second flight to HKG and the resumption of PVG that partially drove DL to back off, in spite of the still reduced capacity to China.
BNE was less than daily and seasonal, and SFO-BNE is being upgauged to recoup some of the seats.
DL had been canceling more flights, without an alliance as strong as what AA or UA have in LAX.
I think UA will be fine. lol
Mark,
while you run around the internet on your UA rah-rah campaign, it is worth noting that UA lost money in the 4th quarter of 2023 and likely will do the same in the first quarter of 2024 when the DOT gets around to reporting profitability data for this year.
In fact, in 2023, DL made $294 million flying the Pacific compared to UA’s $360 million even though DL had half the TPAC revenue of UA. Just as has been true, DL generates much higher profits on much less capacity on its international system than UA.
The whole reason that UA dumped so much capacity onto the Pacific was because it failed to deliver decent profits over the Atlantic so moved a bunch of aircraft to the Pacific – and killed its profitability there. UA made less than half of DL’s $1.2 billion in profits over the Atlantic in 2023.
More dramatically, DL made 6X what UA made to Latin America in the last quarter of 2023. Anyone that bothered to follow schedule changes noticed that UA followed every single one of DL’s increases in capacity – and managed to make far less money.
UA doesn’t run its airline for maximum profitability. UA runs its airline for market share because it is run by a CEO and exec team that is afraid to death that someone else – DL – will grow its international system and actually grow its international system and do it profitably, something UA clearly cannot do.
UA can either protect share or it can fulfill its mandate to protect its stockholders. It cannot do both.
I know what Timmyboy problem is.
Since reporting financial results for Q1, UAL stock has gone up 20% more than DAL and, of course, this makes the DAL cheerleader-in-chief nervous.
Well Timmyboy, this is only the beginning. UAL expected earnings per share in 24 around 10 versus just 6.5 for DAL. Price to earnings per share 5.5 for UAL and 8.1 for DAL. So, overhyped DAL is way overvalued compared to UAL and the market has started to realize. To have a similar PER to DAL’s, UAL should be at 81, which implies almost a 40% increase for UAL. And this doesn’t take into account that UAL is gonna grow much faster than DAL in the coming years.
As to the safety issue, in the last few days, a DAL plane lost an engine panel while flying and another plane burst into flames at the gate. No need to say anything else.
It’s written on the wall Timmyboy. During the pandemic, Kirby got it right and Bastian was scared. Do yourself a favor and go long UAL and short DAL, and stop talking bullshit about safety, premium revenue, and so on.
@ Tim — How long will it take you to comprehend that NO ONE here cares how much profit airlines make. Clearly, Delta’s customers are more stupid than United’s. They pay more fo less.
marco,
you neither understand business or aviation.
As usual, you and others try to argue that “everyone else is doing it” when aviation safety problems come up at United because you don’t understand that the FAA didn’t initiate an investigation of UA because UA was having issues but because they saw a lack of training and safety controls in place at UA which UA has addressed.
As with most data, if you cherrypick the right timeframe you can make your point. Using much more standard timeframes, DAL stock has outperformed UAL stock.
And stock performance doesn’t mean as much as the size of the pie- or market cap – if the focus is on size. Delta’s market cap is considerably higher – almost twice as high as United’s.
UA has the potential to increase its profitability and thus its market cap but it has to stop dumping capacity into markets where it cannot generate industry leading profits.
The reason why Delta makes so much money and is worth so much more is because Delta runs a best-in-class business first and then worries about market share and growth.
Let’s see what UA does with its newly granted right to keep growing – depending on what Boeing can do to provide airplanes.
gene,
since you have proven over and over by your posts that you only care about yourself, it is not a surprise that you focus solely on what benefits you – in fact, you WANT someone else to lose in order for you to win.
UA is a for-profit corporation. There is nothing in their charter that includes flying the most ASMs or having the largest network or market share.
UA underperforms because it has an improper focus on things that don’t matter compared to things that do even as they repeatedly and accurately say that they want to deliver industry-leading profits. They can’t do that as long as that imbalance of focus exists.
@ Tim — I said nothing about winners or losers. Every airline can make or lose lots of money, but I don’t care. The bottom line is that airlines do not care about their customers, so why should passengers care about them? Why is it so difficult for you to understand that everything in life is not about profits?