United won't fly 737 MAX until after summer amid new approval delays
CHICAGO/WASHINGTON (Reuters) - United Airlines Holdings Inc <UAL.O> extended on Friday the cancellation of Boeing 737 MAX flights until early September, a fresh delay that comes as sources told Reuters that the timing of a key certification flight may not happen until at least April.
The new timeline strongly suggests that none of the 737 MAX jets will be flying for a second U.S. summer, an issue that hit U.S. MAX operators' profits during last year's peak travel season. The delays could also mean more potential compensation from Boeing Co <BA.N> to airlines impacted by the safety ban.
Boeing's 737 MAX was grounded worldwide last March after two crashes in Indonesia and Ethiopia that killed 346 people within five months.
The U.S. planemaker has spent months updating software believed to have played a role in both crashes, but fresh issues have surfaced, complicating regulators' efforts to re-approve the plane.
A certification flight as early as this month, after repeated delays, could now take even longer as Boeing tries to resolve the new problems, the sources said.
U.S. airlines that operate the 737 MAX were planning to put the planes back in the air in early June if regulators had approved the plane in the first quarter, but that now looks increasingly unlikely.
Southwest Airlines Co <LUV.N>, the world's largest operator of the 737 MAX, on Thursday extended flight cancellations as a result of the prolonged grounding until Aug. 10.
United is now scheduling flights for after Sept. 4.
One key issue yet to be resolved is whether Boeing must separate two wiring bundles that may be too close together, which could lead to a short circuit and crash if pilots do not respond appropriately. Boeing said Friday it is still in discussions with the Federal Aviation Administration about the issue.
Meanwhile, carriers like Delta Air Lines <DAL.N> that do not operate 737 MAX are picking up strong U.S. travel demand that airlines like United, Southwest and American Airlines Group Inc <AAL.O> have not been able to meet due to their reduced fleets.
Boeing spent $1.4 billion on compensation for 737 MAX customers last year and Chief Financial Officer Greg Smith said this week the company expects "a good portion" of additional settlements to take place this year.
(Reporting by Tracy Rucinski; Editing by Chizu Nomiyama, Steve Orlofsky and Marguerita Choy)
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