Delta Air Lines CEO Ed Bastian said he’s confident Boeing will figure out a software fix for the 737 Max jets implicated in two crashes that killed 346 people over five months.
“We have the ultimate confidence in Boeing. They are a great partner. Our largest fleet partner is Boeing. I know they’re going to get to the right answer … We’ll stay close to Boeing and see how they progress,” Bastian said on CNBC’s “Squawk Box” on Wednesday morning.
The aircraft hasn’t been allowed to fly since mid-March. But Delta, which doesn’t have any 737 Max jets in its fleet, has largely avoided the fallout from the prolonged grounding, reporting Wednesday record revenue and a big jump in profit during the first quarter that beat Wall Street’s expectations.
The airline industry has been reeling from the aftermath of the crashes in Ethiopia on March 10 and Indonesia on Oct. 29. Boeing said it will cut 20 percent of its 737 Max production as it works on a software fix. Bad data feeding into the aircraft’s automated flight system is suspected as a possible cause of the crashes.
The company’s shares have have fallen nearly 9% in the past month. Wall Street analysts recently downgraded Boeing and Southwest Airlines; American Airlines cut its revenue guidance for the first quarter and canceled 1,200 flights. Delta, which doesn’t have any 737 Max jets in its fleet, has largely been insulated from the fallout.
“Our hearts go out to all who are impacted,” Bastian said. “This is not something we want to compete around. I’m confident Boeing will get to the right answer with respect to the fix and hope they get the product back in the sky as soon as possible.”
Boeing is expected to launch a new midsize aircraft, the 797, which could potentially be backlogged as a result of continued troubles with the its 737 Max.
It’s unclear if Delta would opt for a different planemaker, like Airbus, to replace their aging mid-range fleet if the 797 is delayed. Delta currently has 200 aircraft, including 757s and 756s, that need to be retired and replaced by newer models.
Bastian said it’s too early to speculate whether Delta would opt for Airbus if the 737 Max is grounded longer than expected.
“We’ll see how they do,” he said of Boeing. “Clearly if it’s outside our window, it will be a challenge to us, we are hopeful that’s not going to be the case.”
Delta reported adjusted quarterly profit of 96 cents per share, 6 cents above estimates, with revenue also beating forecasts. The airline plans to keep capacity stable during the summer travel season.
