Boeing compensates Alaska Air $160M for 737 MAX 9 Grounding
Alaska Air Group announced Thursday that Boeing has compensated the airline with approximately $160 million for the first quarter, addressing losses due to the grounding of the 737 MAX 9 jets. This payment covers the quarter's lost profits, with the airline anticipating further compensation.
The grounding followed a mid-air incident with an Alaska Airlines-operated MAX 9 jet in January, prompting the U.S. aviation regulator to ground 171 jets for inspection.
"Despite some initial setbacks following the accident and the 737-9 MAX grounding, our performance in February and March exceeded our initial, pre-grounding projections," Alaska Air stated. Consequently, the airline will adjust its first-quarter financial reporting to exclude this compensation, projecting an adjusted loss per share of $1.05 to $1.15, contrary to its earlier plan to include the payment.
Boeing has not yet responded to requests for comment.
The grounding has significantly impacted Alaska and United Airlines, sparking both a manufacturing and reputational crisis for Boeing and its supplier, Spirit AeroSystems. This comes as the airline industry, facing surging travel demand, grapples with production slowdowns at Boeing, as reported by Reuters.
Alaska Air also mentioned last month that its capacity expansion plans for 2024 are uncertain due to the Boeing crisis. CEO Ben Minicucci indicated that the airline might not receive all 47 aircraft scheduled for delivery over the next two years.
Meanwhile, Airbus SE, the industry's other key aircraft supplier, has reported its single-aisle jets are sold out until the end of the decade.
