What's Going On With United Airlines Stock Today?

Zinger Key Points
  • United Airlines to be compensated for 737 MAX grounding losses.

United Airlines Holdings Inc UAL will be compensated by Boeing Co BA for financial losses incurred in the first quarter due to the grounding of 737 MAX 9 aircraft, the carrier said in a recent filing.

United Airlines revealed in a filing that a confidential deal with Boeing will involve “credit memos” for future purchases to offset the financial impact of the grounding and delivery rescheduling. A credit memo is an official acknowledgment of owed money to a customer.

United plans to account for these arrangements as a reduction to the cost basis of the previously-delivered Boeing 737 MAX 9 aircraft and future deliveries of the MAX 9 and MAX 10 aircraft.

United Airlines’s first quarter earnings reflected the approximately $200 million impact from the Boeing 737 MAX 9 grounding, without which the company would have reported a quarterly profit.

By February 5, 78 of United Airlines’ 79 737 MAX 9 aircraft had returned to service after receiving final approval from the Federal Aviation Administration, reported Reuters.

The mid-air panel blowout has significantly damaged Boeing’s reputation, leading to management changes and regulatory restrictions on production, with deliveries halving in March.

Also ReadAlaska Air Gets $162M In Initial Compensation From Boeing For January Incident, Issues Robust Q2 Outlook

Price Action: UAL shares are trading higher by 5.21% at $51.20 on the last check Thursday.

DisclaimerThis content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Shutterstock

Market News and Data brought to you by Benzinga APIs
Posted In: EquitiesNewsMoversMediaGeneralAI GeneratedBriefswhy it's moving
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!