United’s seat problems continue. Two weeks after news that its new Polaris seats would face delivery delays due to “industrial issues” at Zodiac, United faces new short-term delays. The result: United is parking its brand new 777-300s in Seattle.
“Short delays” are now threatening the delivery of aircraft already loaded into the schedule. For example, Newark ⇄ Tel Aviv (UA90/91) was supposed to feature new Polaris seats starting on 05 May 2017. That start date is now threatened. Without Polaris seats, United has been forced to park two brand new 777s in Seattle.
— Woodys Aeroimages (@woody2190) March 25, 2017
— Woodys Aeroimages (@woody2190) March 30, 2017
The long-term delivery issues remain as well. The problem is not merely with labor compensation, but finding the right mix of engineers to deliver a massive quantity of seats. Put another away, Zodiac now appears woefully unprepared to meets its delivery schedules due to issues completely within its control. It’s a self-inflicted wound.
In addition to United’s new 777-300s, the new 787-10s and A350-1000s are slated to receive Zodiac-made Polaris seats and 777-200s and 767-300s will be retrofitted.
A couple weeks ago I wrote a story entitled Why United Won’t Sweat the Polaris Seat Delays and argued that providing Polaris lounges and one of the better soft products in the sky would help keep customers patient. I neglected another important aspect: consequential damages.
Assuming United has halfway-decent lawyers on its legal team, UA’s contract with Zodiac contemplated consequential damages. These are damages that can be proven to have occurred because of the failure of one party to meet a contractual obligation.
As long as consumers do not get fed up with the old seat and jump ship, United may stand to gain here. This is because its consequential damages can represent optimal projected performance, not actual. Say United argues that it has heavily marketed its new Polaris product and the production delay will cost the carrier $50MN (just a number I pulled out of the air). That damages amount likely reflects a very optimistic outlook of sales. Thus, whatever the outcome, United will be covered.
Still, it is one thing to assert contractual damages, it is another to receive them. American has sued Zodiac for similar reasons and the case may languish in court or before an arbitration panel for years.
While United can safely assume that one way or the other, it will eventually prevail, this delay remains quite inopportune and is worsening.
I cannot take credit for the “seatless in Seattle” title and the problem goes beyond Seattle–
“It’s not just seatless in Seattle, it’s seatless in Toulouse,” said aviation consultant Robert Mann, referring to the planemakers’ manufacturing hubs and a Tom Hanks movie. “It’s a serious problem and it’s been building.”
Let’s hope the United Polaris project does not implode due to choosing the wrong seat manufacturer.