United Airlines Stock Declines After Recent FAA Crackdown

United Airlines’ share price dropped by more than 4% today following the news that the Federal Aviation Administration (FAA) would be “increasing its oversight” of the airline. Towards the end of last week, the carrier’s share price had stabilized at around $46, but when the markets opened on Monday morning, they plummeted to a low of $43, before rising again slightly throughout the day to just over $44.

Increased oversight to ensure safety compliance

Boeing aircraft, and in particular its 737 MAX series, have been thrust into the spotlight more than ever since January, when a door plug blew out mid-flight on a 737 MAX 9 belonging to Alaska Airlines. The increased oversight of United Airlines has been put in place by the FAA to ensure the airline is complying with safety regulations, following a series of incidents in recent weeks.

Photo: Benson Truong | Shutterstock

On March 7th, a Boeing 777-200ER belonging to United Airlines lost a tire on take-off from San Francisco International Airport (SFO), bound for Osaka Kansai International Airport (KIX) in Japan. The flight diverted to Los Angeles International Airport (LAX), where it landed safely.

Read more:

United Airlines Boeing 777 Loses Tire On Takeoff From San Francisco

Passengers affected are rescheduled onto a later service this evening.

The next day, a United Airlines Boeing 737 MAX 8 rolled onto the grass after landing at George Bush Intercontinental Airport (IAH) in Houston. Data from ch-aviation shows that the aircraft, registered as N27290, is one of 85 737 MAX 8s that make up United Airlines’ fleet, and was delivered to the carrier in June 2023.

Photo: Angel DiBilio | Shutterstock

And just one week later, on March 15th, a United Airlines Boeing 737-800 landed at Rogue Valley International-Medford Airport (MFR) in Oregon with an external panel missing. Flight UA433 had arrived from San Francisco, carrying 133 passengers and six crew members. At the time, United Airlines said, “We’ll conduct a thorough examination of the plane and perform all the needed repairs before it returns to service,” according to a report by The Washington Post.

What might this mean for United Airlines?

Among the potential actions being mulled over by the FAA as part of its increased oversight is preventing United Airlines from operating any new routes or flying paying passengers on new aircraft, as reported by Bloomberg. If this does happen, it could not have come at a worse time for United Airlines, with the peak summer travel season fast approaching.

Photo: Vincenzo Pace | Simple Flying

The looming threat of such measures to the airline’s operation has likely contributed to the slump in share price. That said, despite today’s drop in share price, it is still somewhat higher than the low of $34 seen in October 2023.

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What do you think of the news that the FAA will increase its oversight of United Airlines in a bid to ensure continued compliance with safety regulations? Have you flown on the carrier recently? Share your thoughts and experiences by commenting below.