Boeing pays Alaska Air $160 million for losses from door plug incident
Alaska said it expects additional compensation from Boeing Alaska Air Group, the parent company of Alaska Airlines, has received $160 million from Boeing for losses caused by a midair blowout on one of its planes in January. The incident occurred after a door plug detached from a Boeing 737-9 MAX plane midflight. Alaska Air Group said its first quarter operations were significantly impacted by the incident and the subsequent grounding of the Boeing planes. The company expects additional compensation from Boeing, but the terms are confidential.
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The parent company of Alaska Airlines said it received $160 million from Boeing to compensate for losses following a midair blowout on one of its planes in early January. Calling it “initial compensation,” Alaska Air Group said the amount was roughly equal to its lost profits in the first quarter after a door plug detached from a Boeing 737-9 MAX plane midflight in early January.
Alaska Air Group’s first quarter “operation and results were significantly impacted by flight 1282 in January and the Boeing 737-9 MAX grounding which extended into February,” the company said in a statement filed with the U.S. Securities and Exchange Commission Thursday. The Alaska Airlines fleet includes 65 Boeing 737-9 MAX planes.
The company said its adjusted pretax profit would have increased 80% if it weren’t for the midflight blowout and the Federal Aviation Administration’s subsequent grounding of the Boeing planes. The 737-9 MAX grounding caused some customers to book elsewhere during January, but February and March both finished above what Alaska had anticipated, according to the statement.
The losses during the FAA grounding were largely offset by strong flight demand and “continued recovery of West Coast business travel” in February and March, the statement said.
Alaska Air Group said it expects additional compensation from Boeing, but the terms are confidential.
Topik: Aviation, Airlines