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Boeing paid Alaska Airlines $160 million for 737-9 MAX grounding

In World
April 05, 2024
A logo with the inscription "Boeing" pictured on a hall of the Boeing distribution center. Georg Wendt/dpa

A logo with the inscription “Boeing” pictured on a hall of the Boeing distribution center. Georg Wendt/dpa

US aircraft maker Boeing paid Alaska Airlines some $160 million in compensation after an incident involving a torn-out fuselage section on a Boeing 737-9 MAX aircraft in January which led to the grounding of the model.

On January 5, a defective door plug flew off an Alaska Airlines Boeing 737 MAX 9 shortly after taking off from Portland in the US state of Oregon.

The mid-air blow-out left a gaping hole in the plane and forced an emergency landing. None of the more than 170 people on board were injured.

As a result, the US Federal Aviation Administration (FAA) grounded the MAX 9 aircraft featuring the door plugs for nearly a month, affecting around 170 aircraft worldwide.

In an investor update on Thursday, Alaska Airlines said that the grounding cost it “approximately $160 million in Q1 pretax profit, primarily comprising lost revenues, costs due to irregular operations, and costs to restore [its] fleet to operating service.”

The US airline said Boeing paid it “approximately $160 million in cash during the first quarter” in what it referred to as “initial compensation.”

“Additional compensation is expected to be provided beyond Q1, the complete terms of which are confidential,” Alaska Airlines continued.

Following an initial investigation, the US National Transportation Safety Board (NTSB) determined that fastening bolts were missing from the fuselage section of the aircraft. Boeing chief executive Dave Calhoun took responsibility for the error.

The FAA scrutinized production and demanded a plan for improvements from Boeing.

United Airlines also had to ground a number of aircraft until the end of January following the incident. United has 79 planes of this type.

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