BA Boeing Co

By Alison Sider 

United Continental Holdings Inc. said the grounding of its Boeing Co. 737 MAX jets and the suspension of flights to New Delhi led the carrier to trim its forecast for capacity growth this year.

United's shares rose 4.5% on Wednesday as executives explained their plans to increase flying by at most 5% this year, down from a previous forecast to add 4% to 6% to its capacity this year. The airline said after hours on Tuesday that earnings in the first quarter had roughly doubled from a year earlier.

Chief Operating Officer Greg Hart said during an earnings call on Wednesday that United's 14 MAX jets represent just 1.4% of its flight capacity. United said earlier this week that it would pull the MAX from schedules until early July, citing uncertainty about when regulators will clear the planes to fly again as Boeing works to fix a software issue following two deadly plane crashes. The MAX has been grounded around the world since last month, after the crash of an Ethiopian Airlines flight.

United said it has made up for the missing MAX jets with spare aircraft, putting off optional work on planes like Wi-Fi installation, and flying bigger jets on routes that the MAX would ordinarily operate. Executives have said that can only continue so long before challenges and costs mount.

"With 14 aircraft, that was something that we could manage for a month or two given some flexibility we have in our maintenance plans," Mr. Hart said. "Beyond that, it gets really tough to manage."

Mr. Hart said United didn't plan to add simulator training requirements for the MAX. The Federal Aviation Administration on Tuesday took another step toward formally signing off on training requirements associated with a pending software fix to the MAX's suspect automated anti-stall system, which investigators are focusing on in both recent crashes. The proposed revisions, which were released for additional public comment, don't mandate additional time for pilots in ground-based flight simulators.

United is due to receive another 16 MAX planes this year. Executives said they don't anticipate major delays to those deliveries if the plane returns to service this summer. Chief Financial Officer Gerry Laderman said United would likely discuss with Boeing costs incurred as a result of the grounding.

Write to Alison Sider at alison.sider@wsj.com

(END) Dow Jones Newswires

April 17, 2019 14:06 ET (18:06 GMT)

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