Dividends and United Airlines CEO kickstarts Airbus talks

Most of us have some sort of routine which we start the day, because that is the easiest part to manage. The time we wake up, what we have for breakfast, the commute to work and then your work begins and things change because you do not necessarily control everything. That is normal and we tend to do it because one we like it and two your can concentrate on other things. Every once in a while, the routine is changed, whether it is the time you wake up, the breakfast or the commute, but something changes and we have to adapt.

In an article by Tim Hepher and Rajesh Kumar Singh of Reuters, United Airlines has approached Airbus about buying more A311neo airplanes. What has changed is Boeing’s concerns with 737 Max 10.

United Airlines has a long history of buying planes from Boeing and has not cancelled any orders but CEO Scott Kirby has removed the order from internal plans. The history of United includes companies they merger with such as Continental Airline that were long time Boeing customers. The problem for United is there are 2 manufacturers that dominate the passenger plane industry Boeing and Airbus and both have heavy back orders on their books. However, according to trade publication Air Insight, the companies are in talks about squeezing in if an opening should occur.

The issue at Boeing is they do not know how long the latest concerns – a door fell off an Alaskan Airlines flight. All the doors need to be checked and what type of fix is needed and for the regulators to sign off on the safety.

United has 45 A350s on order to be delivered by 2030. The planes would replace Boeing 777s.

Linking to dividend paying stocks, many companies deal with single suppliers for the bulk of their products, partly due to history and partly due to mergers within the industry, however the same companies are quick to have backups or alternatives if the supplier’s reliability changes. One of the elements you are buying with a dividend producing company is the ability to pivot if necessary.

There are more questions than answers, till the next time – to raising questions.

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