737 max 10 united
Today, IAM union members will vote on a revised deal Boeing offered after trading with IAM’s leadership. The agreement includes a four-year pay increase of 38%, plus a $12,000 signing bonus, tweaks to the 401K plan, and sick time call-outs.
The IAM leadership commented, “In every negotiation and strike, there is a point where we have extracted everything that we can in bargaining and by withholding our labor. We are at that point now and risk a regressive or lesser offer in the future.” The Department of Labor has been involved in these talks to keep them moving and closing the gap. Even the White House commented on the new proposal, “Machinists at Boeing have sacrificed over the years and deserve a strong contract.”
It goes through if more than 50% of the IAM voters approve the offer. The need for this vote to pass is crucial for the commercial aviation silo. We have written about the unstable duopoly several times. The instability at Boeing has had a far and broad impact. For example, Air Canada announced it is returning two 767-300ERs from retirement. This is a highly unusual move. It is not a signal of industry strength.
One of Boeing’s biggest and most important customers is United Airlines. The airline and OEM, with common DNA from Bill Boeing’s start-up company, share a deep and long relationship. It is noteworthy when United buys aircraft from a source other than Boeing.
Here’s what we see from United’s deliveries from current aircraft programs.
The pause in MAX deliveries disrupted United’s network planning. Airlines sell seats 360 days out, so planning is essential, and delivery disruptions cause chaos. It is a delicate balance, and we see time and again the industry loses balance quickly. It always recovers, but that recovery invariably means people are stuck somewhere they don’t want to be, with airlines bleeding money as they recover.
In 2021, United placed a huge MAX order. One hundred fifty orders were for the MAX 10, which Boeing must deploy to slow the soaring Airbus A321neo. Another crucial Boeing customer, Ryanair, also has 150 MAX 10s on order, plus 150 options. Delta has 100 MAX 10s on onrder. Boeing lists 1,201 MAX 10 orders, nearly 13% of its MAX backlog. It is the second most ordered MAX model.
The need for the MAX 10 and its delayed certification led United to pivot toward the A321neo. That was in April 2024, following a 2021 order for 70 A321neos. In December 2019, United ordered 50 A321XLRs. United MAX 10 order was made even as it was ordering these A321s.
United’s focus on this size aircraft follows similar moves by American and Delta, the largest operators of the 757. The table above shows that despite United’s eagerness for the A321neo, it can’t get as many as it wants when it wants them. The reason for this is the unsettled and disrupted aero supply chain. COVID has much to do with this, but so do Boeing’s management decisions.
One can’t go back and change history. Today’s vote’s outcome is pivotal. For the sake of the industry, we hope the IAM can live with the latest offer and get back to work.
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