Boeing compensates Alaska Airlines with $160 million for 737 MAX 9 groundings

Boeing has paid $160 million to Alaska Airlines to compensate for profits lost in the grounding of the 737 Max 9 planes following the January panel blowout on the fuselage of an Alaska Airlines jet.

The airline’s parent company, Alaska Air Group, said Thursday in a statement filed with the Securities and Exchange Commission that it had “received initial compensation from Boeing to address the financial damages incurred as a result of Flight 1282 and the 737-9 MAX groundings.”

The company claimed that as a result of the door plug blowout, which occurred shortly after the Alaska Airlines flight departed Portland, Oregon, on Jan. 5, it lost $160 million in first-quarter pretax profits.

The filing also showed that had the Federal Aviation Administration not grounded the 737 Max 9 jets, which extended into February, the company’s adjusted pretax profits would have improved by 80%.

“Although we did experience some book away following the accident and 737-9 MAX grounding, February and March both finished above our original pre-grounding expectations due to these core improvements,” Alaska Air Group said.

Following Boeing’s recent manufacturing problems, there have been delays in plane deliveries for airlines, including Alaska Airlines, which does not expect to receive all the 47 planned deliveries from Boeing over the next two years, Reuters reported.

Meanwhile, Airbus sales have spiked at the beginning of 2024, with the European planemaker delivering 79 planes in the first two months of the year, a blow to its primary rival Boeing.

The Washington Examiner reached out to Boeing for comment.

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Boeing’s production delays have affected other airlines, causing United to ask pilots last week to take unpaid leave starting in May as they won’t be able to fly as many hours.

Boeing and U.S. airlines are expected to release their first-quarter results later in April, according to CNBC.