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United Airlines Holdings Inc. said it would cut domestic flights, as the spreading coronavirus depresses bookings.
Airlines world-wide have parked more than 1,000 planes as bookings have fizzled and concerns have risen that depressed demand could extend into the busy peak summer season.
The carrier said Wednesday it plans to store some wide-body jets and is offering staff unpaid leaves of absence in April. The effort is the latest by airlines to mitigate the shock to the industry caused by cascading travel restrictions and passenger concerns over flying. Companies including Boeing Co. BA -6.20% are instructing their employees to cut out unnecessary travel.
Other U.S. carriers have sought to stimulate demand by offering passengers the option to change flights without penalties.
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A government report to be released in coming days says Southwest Airlines Co. LUV failed to prioritize safety and the airline’s regulator, the Federal Aviation Administration, hasn’t done enough about it.
Southwest pilots flew more than 17 million passengers on planes with unconfirmed maintenance records over roughly two years, and in 2019 smashed both wingtips of a jet on a runway while repeatedly trying to land amid gale-force winds, according to the Transportation Department report, reviewed by The Wall Street Journal.
The lapses are highlighted in a draft audit by the agency’s inspector general that also criticizes the FAA’s oversight of the carrier as lax, ineffective and inconsistent. The document indicates no agency enforcement action resulted from those safety slip-ups or certain other alleged hazards. In some cases, the report alleges, the FAA’s overall approach served to “justify continued noncompliance with safety regulations.”
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Today’s Logistics Report: Parceling Out Profits; Amazon’s Shipping Prime; Flipping Reverse Logistics
United Parcel Service Inc.’s close work with Amazon.com Inc. is paying off for the package carrier. The package carrier’s shipping volume and operating profit jumped sharply in the fourth quarter, the WSJ’s Paul Ziobro reports, as UPS gets cozier than ever with the largest online retailer in the U.S. while rival FedEx Corp. focuses on retailers competing with the e-commerce behemoth. UPS Chief Executive David Abney says Amazon now makes up 11.6% of the company’s annual revenue, but that other major retailers all are shipping more with the carrier. The company’s pricier air express services grew at a double-digit pace during 2019, including a 25.9% year-over-year gain in next-day air shipments in the fourth quarter. FedEx’s overnight air shipments have declined in three of the past four quarters and SJ Consulting says UPS now holds a bigger share of the next-day market than its Memphis-based rival.
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The financial results of European budget leader Ryanair suggest there is more bark than bite in complaints about unbundled air fares. “Just raise my ticket price instead of loading me up with extra charges, and I’ll pay.” Evidence from the airline industry suggests this is something people say but don’t do.
The trend of “unbundling”—dividing a product up into different payable segments—has picked up pace again among carriers. It was pioneered by the likes of Southwest and European budget leader Ryanair, RYAAY +5.93% but full-service brands like Delta Air Lines, United Airlines and British Airways eventually followed suit with “basic economy” fares. Now, Lufthansa and Emirates—which focuses more than most on the luxury market—are testing the waters of unbundling in business class.
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Freeze on Boeing 737 MAX forces Spirit AeroSystems to cut back
The biggest Boeing Co. BA -0.76% 737 MAX supplier said it is planning an initial 2,800 layoffs, the first announced job cuts since the grounding of a plane that is rippling through the broader aerospace industry.
Spirit AeroSystems Holdings Inc. SPR -1.59% makes the fuselage and engine parts for the MAX and had been producing enough for 52 jets a month before Boeing said it would freeze assembling the planes in January for a “temporary” time.
As the largest U.S. manufacturing exporter and one of the nation’s top private employers, Chicago-based Boeing plays a big role across the industry and in the U.S. economy.
Production of the MAX, which was Boeing’s best-selling plane, supported thousands of jobs across a network of over 600 suppliers and hundreds of other smaller firms in the global MAX supply chain.
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OPINION
Where were the acerbic, scathing employees when MCAS was designed?
A Boeing 737 MAX in Renton, Wash., Dec. 16, 2019. PHOTO: LINDSEY WASSON/REUTERS
The latest crop of Boeing emails is a torment to the company in its struggle to get the 737 MAX into the air, but a secret that should not be a secret is that all of corporate America, not just Boeing, lives these days by employing creative, freethinking people who spout off acerbically, critically and colorfully in electronic messages.
Think of the Sony emails leaked by presumed North Korean hackers. My own corporate overlords in the media business have lived in this world longer than most. When a General Mills executive was hired to cut costs at the Los Angeles Times in 1995, the newsroom immediately dubbed him the “cereal killer.” The executive was philosophical. After all, his new company employed too many sardonic, highly verbal people to expect anything else.
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Aerospace giant’s deliveries also slump to 380 jets, the lowest since 2005
Boeing Co. said deliveries and new orders for its jetliners hit their lowest point in more than a decade as the global grounding of the 737 MAX undermined the aerospace giant’s business.
The U.S. plane maker in 2019 handed over 380 aircraft, including military versions of its jetliners, a 14-year-low that compares with a record 863 deliveries by European rival Airbus SE. Boeing delivered 806 planes in 2018, a high for the company.
The Chicago-based company last year brought in new orders for 246 commercial jets of all types, its lowest tally before cancellations and model swaps since 2003.
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Iran’s admission that its armed forces shot down a Ukrainian passenger airliner appeared intended to salvage its credibility at a time of heightened international tension and domestic unrest. Instead, it triggered quick anger from Iranians aimed at the country’s leadership.
Security forces in Tehran fired tear gas to disperse hundreds of people who took to the streets in protest against the military, which on Saturday acknowledged shooting down the Ukraine International Airlines Boeing 737-800 by mistake.
Some Iranians blamed their leadership for incompetence and for lying during the first three days after the crash when it denied Western claims the plane had been hit by an Iranian missile, killing 176 people. Hundreds gathered outside Amirkabir University of Technology in the capital, where some young men tore down posters of Qassem Soleimani, the prominent general who was killed in a U.S. drone strike in Baghdad last week and mourned as a national hero.
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