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Boeing Pays Alaska Airlines $160 Million for 737 Max 9 Grounding

The fuselage plug area of Alaska Airlines Flight 1282 Boeing 737-9 MAX, which was forced to make an emergency landing with a gap in the fuselage, is seen during its investigation by the National Transportation Safety Board (NTSB) in Portland, Oregon, U.S. January 7, 2024.

NTSB | Via Reuters

Boeing paid Alaska Airlines $160 million in compensation in the first quarter for the grounding of the 737 Max 9.

The Federal Aviation Administration grounded the jets after a door plug blew out of a nearly new Boeing 737 Max 9 operated by Alaska when the flight was at 16,000 feet, coming inches from another tragedy involving Boeing’s best-selling jet.

Alaska said in a filing on Thursday that its first-quarter “results were significantly impacted by Flight 1282 in January and the Boeing 737-9 MAX grounding which extended into February.”

Alaska said it expects additional compensation beyond the first quarter.

Alaska also noted that demand was strong despite an immediate impact after the accident. “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,” it said.

The filing is an early look at what Boeing is providing its major customers due to the Jan. 5 accident, which has led to additional government scrutiny and a slowdown in aircraft deliveries and production.

United Airlines‘ pilots union told members last week that the airline is offering pilots unpaid time off in May because of delayed Boeing deliveries, CNBC reported earlier this week.

Boeing didn’t immediately comment. The manufacturer and U.S. airlines report first-quarter results later this month.

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