(DailyDig.com) – Alaska Airlines has received $160 million from Boeing as partial compensation for the 737 MAX 9 jet Alaska Air purchased. A panel blew out midair in January 2024, and the Federal Aviation Administration (FAA) grounded all the Max 9 jets for three weeks.
The U.S. Securities and Exchange Commission (SEC) stated that the payment was for the damages financially incurred as a result of the Flight 1282 incident and the subsequent grounding of all MAX 9 jets.
According to Alaska Airlines, they lost the amount of the Boeing payment to them just in the first quarter of this year.
According to a statement in the regulatory filing from April 4, Alaska Air’s 60 billion dollars in losses included the cost of irregular scheduling and operations, lost revenues, and what it cost them to restore their fleet to operational service.
Alaska Air expects Boeing to provide more compensation for the additional losses they face. After the FAA grounded all US flights of Boeing’s 737 MAX 9, thousands of passengers and flights were canceled. The filing also stated that Alaska Air expects that their stock shares will suffer losses of almost $1.15 per share during the first quarter.
The airline reported that despite some lost bookings following the January accident, the travel demand actually increased over the next two months due to an increase in West Coast business travel demand. In stock trading on the afternoon of April 4, Alaska Air shares increased over four percent while Boeing’s shares increased over one percent.
Boeing’s CFO, Brian West, responded to queries regarding the payment to Alaska Air by saying that the January 5 occurrence is recognized by them as a consideration for their customers. They reported it as such in their earnings for the first quarter.
The grounding by the FAA as a result of the panel blowing out while in flight affected both Alaska Air and United Airlines. This created a crisis for Boeing in terms of reputation and stalled manufacturing. They will be delayed up to two years for the delivery of the ordered aircraft.
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