Apr 4, 2024 - Business

Boeing paid Alaska Airlines $160M for losses after 737 MAX 9 grounding

A federal inspector examining the fuselage plug area of a damaged Alaska Airlines-operated Boeing 737-9 MAX in January 2024 in Portland.

A federal inspector examining the fuselage plug area of a damaged Alaska Airlines-operated Boeing 737-9 MAX in January 2024 in Portland. Photo: NTSB via Getty Images

Boeing paid Alaska Airlines around $160 million in compensation for jet groundings after one of its 737 MAX 9 suffered a mid-flight door plug blowout in January, according to a new filing from the airline.

Why it matters: The disclosure widens the fallout for Boeing, which has faced a reputational crisis and seen its manufacturing practices thrust back under the regulatory microscope.

What they're saying: Alaska said in a filing Thursday that its first-quarter operations and finances were "significantly" affected by the panel blowout and that disruptions extended into February.

  • "As a result of the Flight 1282 accident and the Boeing 737-9 MAX grounding, we lost approximately $160 million in Q1 pretax profit, primarily comprising lost revenues, costs due to irregular operations, and costs to restore our fleet to operating service," the airline said.
  • "We have received initial compensation from Boeing to address the financial damages," it added. "As part of this compensation, Boeing paid Air Group approximately $160 million in cash during the first quarter."
  • It added that it expects additional compensation from Boeing over losses from the groundings, though the details of those payments are currently confidential.

Boeing did not immediately respond to Axios' request for comment.

  • It's unclear if Boeing compensated other airlines for losses from having to ground the 737 MAX 9 jets they operate.

The big picture: After the Jan. 5 blowout, all 737 MAX 9s in operation were grounded for at least two and a half weeks until the Federal Aviation Administration again cleared them for flight after an inspection and maintenance process.

  • Airlines, including Alaska, said their inspections revealed quality control issues with the jets, including loose bolts. They also blamed Boeing for reputational damage they suffered.
  • Preliminary findings from a federal probe into the blowout found that the affected plane was missing at least three bolts in the area of the fuselage that was damaged.

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