United Airlines (NYSE:UAL) is in the news this morning, and shares of UAL stock are down about 5%. This comes after the Federal Aviation Administration (FAA) announced that it would increase its oversight of the airlines following a string of safety issues this year.
Over the last month, there were six adverse episodes involving United’s planes.
More About the FAA’s Crackdown on United
The FAA reported that it was looking to ensure that the airline is following “safety regulations,” as well as “identifying hazards and mitigating risk” and “effectively managing safety.”
The agency noted that United’s “future projects may be delayed,” while the FAA will launch an overall assessment of the airlines.
The FAA may stop United from implementing new routes and prevent it from placing consumers on aircraft that it obtained recently. The agency has already decided to stop UAL from being able to switch its pilots to flying different types of planes.
An Overview of United’s Safety Events
One of the worst episodes involved a plane catching on fire after suffering problems with its engine. On another occasion, a plane’s “external panel” was absent, and in a third incident, a tire was missing.
Five of the six problematic incidents involved Boeing (NYSE:BA) planes. Boeing has had multiple problems this year, and the firm announced today that its CEO would step down at the end of this year.
CEP Scott Kirby has said that the airline would examine the incidents and the methods that it uses to teach its employees.
Kirby added that there was no connection between the incidents.
The Price Action of UAL Stock
Heading into today, UAL stock had risen 7% in the previous five trading days and had gained 3.3% in the preceding month while climbing 12.6% so far this year.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
