Boeing Pays Alaska Airlines US$160m+ for 737-9 Grounding

DALLAS — Boeing paid Alaska Airlines (AS) over US$160 million to compensate for the carrier's losses after the Federal Aviation Administration (FAA) grounded a portion of the 737-9 fleet.

The grounding was implemented immediately after a door panel flew out of one of AS' Boeing 737-9s in January, impacting almost 200 aircraft in the U.S. alone.

As a result, AS was forced to cancel thousands of flights, leading to a noticeable loss of profit in its Q1 earnings. Boeing's compensation also accounted for the service required to place the impacted Boeing 737-9s back into revenue service. Simultaneously, Boeing recognized that it would spend billions of dollars in reparations following the second wave of Boeing 737 MAX family recalls.

While the airline believes that Boeing's compensation is appropriate for the airline's current financial situation, more money is expected to come. AS continues to recover from its losses as Boeing struggles to repair the aircraft's production issues.

The Boeing 737-9 Groundings

On January 5, a part of AS Flight 1282's fuselage flew off while the aircraft was flying at 16,000 feet, prompting the aircraft to declare an emergency and land soon after. Immediately following the flight, investigations concluded that the section that flew off the Boeing 737-9, a door plug, contained four missing bolts.

As a result, Boeing is currently facing a series of investigations regarding criminal activity and quality control issues. FAA's investigation concluded that the aircraft manufacturer "allegedly failed to comply with manufacturing quality control requirements."

In late February, the FAA urged Boeing to use the investigation's report to improve manufacturing conditions as the Boeing 737-9 grounding ended.