Alaska Airlines announced in a filing Thursday it received a $160 million cash payment from Boeing in compensation for lost revenues stemming from the January mid-flight door plug blowout incident, which forced the grounding of Boeing 737 Max 9 planes, an FAA investigation into Boeing’s safety practices and a reported criminal investigation.
The airline says the payment covers the profits it lost as a result of groundings—which led to “irregular operations, and costs to restore our fleet to operating service” in the first quarter of 2024.
Boeing is expected to provide more compensation beyond the first quarter, but the terms of those agreements are confidential, Alaska said.
Despite initially planning to treat the compensation as earnings, Alaska has since decided to account for it as a reduction to aircraft assets—and has increased its estimated first-quarter losses as a result.
The airline acknowledged that it lost some bookings following the accident, but due to increased demand for air travel, “February and March both finished above our original pre-grounding expectations.”
Neither Boeing nor Alaska immediately responded to Forbes’ requests for comment.
95 cents. That’s the loss per share that Alaska estimates is attributable to the January accident and resulting Boeing 737 Max 9 groundings. Alaska’s new estimated losses per share in the first quarter of this year are $1.15 to $1.05.
On January 5, the door plug of Alaska flight 1282, a Boeing 737 Max 9 plane, blew out mid-flight, leaving a gaping hole in the side of the plane. The aircraft was able to land safely and there were no injuries, but the incident renewed safety concerns about Boeing planes. It prompted investigations by the National Traffic Safety Board and Federal Aviation Administration, and is now reportedly the subject of a Department of Justice criminal probe. Former Boeing CEO David Calhoun stepped down in response to the incident, calling it a “watershed” moment for the company and noting that it must move forward with “humility and complete transparency.”
Thursday’s filing comes only days after Alaska announced in a statement it remains “committed to Boeing” despite the January incident. Alaska said it would do “everything we can to contribute to the critical work under way to ensure excellence in production quality and safety.”
