Alaska Air says Boeing paid $160 mn in compensation after MAX 9 grounding

Alaska Air Group said on Thursday that Boeing had paid about $160 million to the airline in the first quarter as initial compensation to address the hit from the temporary grounding of 737 MAX 9 jets.

The payment is equivalent to lost profits in the quarter, the carrier said in a filing, adding it expects additional compensation.

An Alaska Airlines-operated MAX 9 jet experienced a mid-air cabin panel blowout in January, which led the U.S. aviation regulator to order a temporary grounding of 171 jets for inspections.


"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," Alaska said.

The airline will now exclude the compensation from its calculation for first-quarter adjusted loss per share, which is expected to be $1.05 to $1.15. It had earlier planned to include the payment in its results.

Boeing was not immediately available for comment on Thursday.

Alaska and United Airlines bore the brunt from the grounding of 737 MAX 9 aircraft following the panel blowout that has sparked a manufacturing and reputational crisis at Boeing and supplier Spirit AeroSystems.

Reuters reported on Wednesday that 737 MAX production at Boeing has fallen sharply in recent weeks, which is expected to ripple through the airline industry desperately seeking aircraft to meet a boom in travel demand.

Last month, Alaska said its 2024 capacity plans were in flux due to the Boeing crisis. The carrier does not expect to get all of the 47 planned deliveries from the planemaker over the next two years, its CEO Ben Minicucci has said.

The aviation industry's other major aircraft supplier Airbus SE is sold out until the end of the decade for single-aisle jets.