Alaska Air Secures $160M Compensation from Boeing in 2025 After 737 Max 9 Midair Incident
In 2025, Alaska Air received $160 million compensation from Boeing following a midair door plug failure on a 737 Max 9, which led to the aircraft's grounding and significant financial impact.
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Highlights
- Alaska Air announced a $160 million compensation payment from Boeing after a January 2024 incident involving a door plug failure on a 737 Max 9 aircraft.
- The incident and subsequent grounding of the Max 9 fleet caused operational disruptions and financial losses estimated at $160 million in Q1 2024.
- Alaska Air expects further confidential compensation from Boeing beyond the initial payment.
Alaska Air Group (ALK) confirmed on Thursday that Boeing (BA) has compensated the airline for financial damages linked to a midair door plug failure on one of its Boeing 737 Max 9 jets in January 2024.
The airline disclosed in a regulatory filing that this safety incident and the resulting grounding of the Max 9 fleet significantly disrupted operations and financial performance, leading to an estimated $160 million loss in the first quarter. These losses were primarily due to lost revenue, costs from irregular operations, and expenses related to restoring the fleet to service.
Alaska Air revealed that Boeing paid $160 million in cash during Q1 2024 and anticipates additional compensation under confidential terms extending beyond the first quarter.
The airline clarified that this compensation will not be included in earnings, projecting a Q1 loss per share between $1.05 and $1.15, with approximately $0.95 attributable to the incident and aircraft grounding.
Despite some booking declines caused by the incident and grounding, Alaska Air reported that February and March results surpassed pre-grounding expectations, driven by network adjustments, robust demand, and a rebound in business travel.
Following the announcement, Alaska Air's shares surged to $44.29, their highest intraday level since August 2023, before closing slightly down at $41.76. Boeing's shares ended the day 0.9% lower at $183.29.
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