Alaska Air Group has said that Boeing paid it about USD160 million in cash during the first quarter of 2024 to compensate for a pre-tax loss during the period resulting from the mid-air cabin panel blowout in early January and subsequent grounding of its B737-9 fleet.
“This cash payment is equivalent to the lost profits resulting from the accident and grounding in Q1 2024. Additional compensation is expected to be provided beyond Q1, the complete terms of which are confidential,” the Alaska Airlines (AS, Seattle Tacoma International) parent said in a US Securities and Exchange Commission filing.
Including the impact of the grounding, the carrier expects an adjusted pre-tax loss ranging between USD180 million and USD195 million for the quarter.
The airline confirmed it experienced a loss of sales following the incident and Alaska Airlines having to temporarily ground its fleet of sixty-five MAX 9s, impacting hundreds of flights and thousands of passengers. However, February and March finished above the company’s pre-grounding expectations due to improvements to its core business performance, such as network adjustments.
However, the impact continues to be felt. The US Federal Aviation Administration (FAA) gave Boeing until the end of May to develop a “comprehensive action plan to address its systemic quality-control issues.” Additionally, the manufacturer will not be able to ramp up the monthly production of new aircraft, cascading into further delivery delays throughout the industry.
Alaska Airlines CEO Ben Minicucci said recently that the carrier does not expect to get all 47 of the deliveries it planned from Boeing over the next two years due to the consequences of the manufacturer’s quality crisis. Many other carriers are facing the same delays, including United Airlines and Delta Air Lines.
