Boeing paid Alaska Airlines $160 million The airline made the announcement Thursday after an in-flight door panel explosion earlier this year.
In a recent U.S. Securities and Exchange Commission filingAlaska Airlines reported that Boeing provided “initial compensation…to address the economic harm resulting from the grounding of Flight 1282 and the 737-9 MAX.”
In January, Flight 1282 was forced to make an emergency landing after its door panel exploded mid-air. Multiple investigations have been launched following this incident. The Federal Aviation Administration temporarily grounded 171 Max 9 planes during the inspection, causing thousands of flight cancellations.
A preliminary National Transportation Safety Board report found that all four bolts designed to hold the panel in place were missing from the plane. Records show that the plane underwent rivet repairs before it was delivered to Alaska Airlines, requiring panels to be temporarily removed and reinstalled upon completion. Repair work was completed by Spirit AeroSystems, a former Boeing subsidiary, and the aircraft was returned to Boeing’s facility in Renton, Washington.
The NTSB continues to investigate this incident. The Justice Department has also launched its own investigation.
Alaska Airlines’ SEC filing states that the airline suffered a loss of approximately $160 million in the first quarter of 2024 due to Boeing’s obligation to ground some of its aircraft.
“As a result of the Flight 1282 incident and the grounding of the Boeing 737-9 MAX, we lost approximately $160 million in pre-tax profit in the first quarter, primarily due to lost revenue, irregular flight operations, expenses, and the cost of returning the aircraft to service,” the airline wrote.
Boeing paid cash compensation to Alaska Airlines during the first quarter.
“This cash payment represents lost profits resulting from the accident and grounding in the first quarter of 2024. Additional compensation will be provided beyond the first quarter, but its full terms are confidential,” it added. .
Boeing referred to a statement made by Chief Financial Officer Brian West last month when asked for comment. ABC News report. “You’re going to see customer focus this quarter,” West said at the Bank of America Industrials Conference.
“We have to address it and we are well along the way to making that happen, and we will continue to support our customers in that responsibility,” West added.
The in-flight panel explosion sparked a safety scandal at Boeing and prompted a management shakeup. In February, Boeing fired Ed Clark, who was in charge of the 737 Max program. In March, CEO Dave Calhoun announced that he would retire at the end of the year. Boeing Commercial Airplanes CEO Stan Deal announced his immediate retirement last month. Board Chairman Larry Kellner has resigned and will not seek re-election in May.
“The world’s eyes are on our company, and I’m confident we will emerge from this moment a better company,” Calhoun said last week.
“We remain committed to completing the work we have undertaken together to return the company to stability through the extraordinary challenges of the past five years, with safety and quality at the forefront of all our activities.” “We will focus on that,” he said.
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