Boeing pays Alaska Air $160m in compensation after MAX 9 grounding

Bengaluru — Alaska Air Group said on Thursday Boeing had paid about $160m to the airline in the first quarter as initial compensation to address the hit from the temporary grounding of 737 MAX 9 jets.

The payment was equivalent to lost profits in the quarter, the carrier said in a filing, adding it expected additional compensation.

An Alaska Airlines-operated MAX 9 jet experienced a midair cabin panel blowout in January, which led the US aviation regulator to order a temporary grounding of 171 jets for inspections.

The airline will now exclude the compensation from its calculation for first-quarter adjusted loss per share, which is expected to be $1.05 to $1.15. It had earlier planned to include the payment in its results.

Boeing was not immediately available for comment on Thursday.

Alaska and United Airlines bore the brunt from the grounding of 737 MAX 9 aircraft after the panel blowout that has sparked a manufacturing and reputational crisis at Boeing and supplier Spirit AeroSystems.

Production of the 737 MAX at Boeing has fallen sharply in recent weeks, which is expected to ripple through the airline industry desperately seeking aircraft to meet a boom in travel demand.

Last month, Alaska said its 2024 capacity plans were in flux due to the Boeing crisis. The carrier does not expect to get all of the 47 planned deliveries from the plane maker over the next two years, its CEO Ben Minicucci has said.

The aviation industry’s other major aircraft supplier Airbus SE is sold out until the end of the decade for single-aisle jets.

Reuters