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Airlines' Bumpy Start to 2024: Alaska Air's (ALK) Boeing Mess
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Alaska Airlines, the wholly-owned subsidiary of Alaska Air Group (ALK - Free Report) , grabbed headlines early in 2024 but for the wrong reasons. A Boeing 737 Max 9 aircraft, operated by Alaska Airlines, had to make an emergency landing on Jan 5 at Portland International Airport following a mid-air scare.
Alaska Airlines’ Ontario, CA-bound flight (1282) saw a panel and window being blown out of the Boeing 737 MAX 9 jet shortly after takeoff from Portland. The rapid loss of cabin pressure caused oxygen masks to drop. The fiasco prompted the flight to turn back and make an unscheduled emergency landing in Portland, OR. Thankfully, none of the 171 passengers or six crew members were seriously injured.
The alarming incident prompted an investigation by the U.S. National Transportation Safety Board. The Federal Aviation Administration (FAA) ordered the temporary grounding of 171 Boeing 737 MAX 9 jets for safety-related inspection.
Alaska Air has grounded its entire fleet of Boeing Max 9 for inspections and maintenance. ALK’s fleet includes 65 such planes. The grounding of these planes led to 170 flight cancellations on Jan 7 by the Seattle, WA-based carrier. The flight cancellations caused unwanted harassment to passengers.
However, ALK has been incredibly understanding, adopting a customer-friendly approach in this situation. The company has stated that the passengers affected by the flight cancellations will be accommodated in the next available flight. They can also request a change/refund without incurring any additional cost.
The only other U.S. airline to operate a Boeing Max 9 plane is United Airlines (UAL - Free Report) . In fact, UAL and ALK, both of whom currently carry a Zacks Rank #3 (Hold), operate more than 60% of the total Boeing Max 9 fleet size across the globe. So, the grounding, if it lasts for a significant period, may hurt the first-quarter 2024 results of these two companies due to reduced traffic. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Chicago-based UAL, with 79 Boeing Max 9 planes in its fleet, is the largest operator of such jets across the globe. UAL, too, has grounded its entire fleet of Boeing Max 9 planes following the FAA directive. The grounding led to multiple flight cancellations at UAL over the weekend, too. UAL is looking to accommodate the affected passengers on other flights.
Boeing Max 9 planes are used by six other airline companies across the globe. The users include the Panama-based Copa Holdings (CPA - Free Report) . CPA currently carries a Zacks Rank #3 (Hold).
The Latin American carrier suspended operations of 21 of its 737 MAX 9 planes until they undergo the required technical inspection. Following the temporary grounding, CPA issued the following statement, "The airline's team is working to minimize the impact on our passengers, although some delays and cancellations are expected due to this situation beyond the airline's control. We recommend our passengers to check their flight status here or on the Copa Airlines mobile app."
Boeing 737 MAX planes have made news for the wrong reasons in the past, too. In Oct 2018, a Boeing 737 MAX 8 plane crashed, killing 189 people. Five months later, Ethiopian Airlines’ Boeing 737 MAX 8 plane crashed, killing 157 people. Regulators across the globe grounded Max 8 planes for nearly two years following the twin crashes.
It remains to be seen how long the grounding lasts for the latest episode involving Alaska Air’s Boeing 737 Max 9 plane. The longer the grounding period, the more problems there are for Boeing 737 Max 9 operators like UAL, ALK and CPA. These companies would have to adjust their schedules to meet the buoyant air travel demand scenario. Given this development, we expect investors interested in the Zacks Airline industry to eagerly wait for further updates on this issue.
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Airlines' Bumpy Start to 2024: Alaska Air's (ALK) Boeing Mess
Alaska Airlines, the wholly-owned subsidiary of Alaska Air Group (ALK - Free Report) , grabbed headlines early in 2024 but for the wrong reasons. A Boeing 737 Max 9 aircraft, operated by Alaska Airlines, had to make an emergency landing on Jan 5 at Portland International Airport following a mid-air scare.
Alaska Airlines’ Ontario, CA-bound flight (1282) saw a panel and window being blown out of the Boeing 737 MAX 9 jet shortly after takeoff from Portland. The rapid loss of cabin pressure caused oxygen masks to drop. The fiasco prompted the flight to turn back and make an unscheduled emergency landing in Portland, OR. Thankfully, none of the 171 passengers or six crew members were seriously injured.
The alarming incident prompted an investigation by the U.S. National Transportation Safety Board. The Federal Aviation Administration (FAA) ordered the temporary grounding of 171 Boeing 737 MAX 9 jets for safety-related inspection.
Alaska Air has grounded its entire fleet of Boeing Max 9 for inspections and maintenance. ALK’s fleet includes 65 such planes. The grounding of these planes led to 170 flight cancellations on Jan 7 by the Seattle, WA-based carrier. The flight cancellations caused unwanted harassment to passengers.
However, ALK has been incredibly understanding, adopting a customer-friendly approach in this situation. The company has stated that the passengers affected by the flight cancellations will be accommodated in the next available flight. They can also request a change/refund without incurring any additional cost.
The only other U.S. airline to operate a Boeing Max 9 plane is United Airlines (UAL - Free Report) . In fact, UAL and ALK, both of whom currently carry a Zacks Rank #3 (Hold), operate more than 60% of the total Boeing Max 9 fleet size across the globe. So, the grounding, if it lasts for a significant period, may hurt the first-quarter 2024 results of these two companies due to reduced traffic. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Chicago-based UAL, with 79 Boeing Max 9 planes in its fleet, is the largest operator of such jets across the globe. UAL, too, has grounded its entire fleet of Boeing Max 9 planes following the FAA directive. The grounding led to multiple flight cancellations at UAL over the weekend, too. UAL is looking to accommodate the affected passengers on other flights.
Boeing Max 9 planes are used by six other airline companies across the globe. The users include the Panama-based Copa Holdings (CPA - Free Report) . CPA currently carries a Zacks Rank #3 (Hold).
The Latin American carrier suspended operations of 21 of its 737 MAX 9 planes until they undergo the required technical inspection. Following the temporary grounding, CPA issued the following statement, "The airline's team is working to minimize the impact on our passengers, although some delays and cancellations are expected due to this situation beyond the airline's control. We recommend our passengers to check their flight status here or on the Copa Airlines mobile app."
Boeing 737 MAX planes have made news for the wrong reasons in the past, too. In Oct 2018, a Boeing 737 MAX 8 plane crashed, killing 189 people. Five months later, Ethiopian Airlines’ Boeing 737 MAX 8 plane crashed, killing 157 people. Regulators across the globe grounded Max 8 planes for nearly two years following the twin crashes.
It remains to be seen how long the grounding lasts for the latest episode involving Alaska Air’s Boeing 737 Max 9 plane. The longer the grounding period, the more problems there are for Boeing 737 Max 9 operators like UAL, ALK and CPA. These companies would have to adjust their schedules to meet the buoyant air travel demand scenario. Given this development, we expect investors interested in the Zacks Airline industry to eagerly wait for further updates on this issue.