Alaska Airlines To Be Awarded Over $200 Million For The Boeing 737 MAX 9 Debacle

The airline has been awarded an additional $61 million, bringing the total compensation to over $200 million.

Another chapter in the Alaska Airlines Flight 1282 saga sees Boeing awarding Alaska Airlines an additional payment for the inconvenience and loss of profits caused by the loss of the 737 MAX 9 door plug blowout.

More money, more problems

According to Reuters,Alaska Airlines has received $61 million in supplier credit from Boeing as additional compensation for the inconvenience and loss of profits caused by the incident regarding AA1282 and the subsequent grounding of all Boeing 737 MAX 9 aircraft.

The airline revealed on Friday in its quarterly report that the credit will be used to purchase Boeing products in the future.

The $61 million in credit is in addition to the $162 million in cash that Boeing had to pay Alaska Airlines in the first quarter of this year. It brings the total compensation paid to the airline to $223 million.

United’s compensation?

United Airlines was one of the airlines that was greatly affected by the incident. The airline has 79 737 MAX 9s in its fleet, with another 31 on order. When the Federal Aviation Administration (FAA) grounded the type, the airline lost an estimated $200 million.

Photo: The Global Guy | Shutterstock

The airline blames Boeing for the loss and expects the manufacturer to compensate it fairly. A month ago, the two entities came to an agreement. It states that Boeing will offer United supplier credits. The amount has not yet been disclosed.

Recap

On Friday, January 5th, Alaska Airlines flight 1282, operated using a brand new Boeing 737 MAX 9, diverted to Portland International Airport (PDX) after losing the mid-aft door emergency door, interior panel, and unoccupied seat shortly after takeoff. The loss of part of the fuselage resulted in a rapid decompression, which forced the crew to make an emergency landing.

The incident was surprising, considering the aircraft (registered N704AL) was only three months old. Investigations have since found severe quality control issues at Boeing and that the door plug was incorrectly installed.

Photo: Joe Kunzler | Simple Flying

It prompted the FAA to ground all Boeing 737-9s until inspections can be completed. More aircraft with similarly shoddy workmanship were found. The compensation payments directly result from these aircraft being grounded for repairs and inspections.

The NTSB also accused the manufacturer of stonewalling its investigation by failing to provide the required documentation. The investigation showed that Boeing workers removed the door plug to fix damaged rivets. However, the door plug was closed without the use of any retention bolts, two vertical movement arrestor bolts, or the forward upper guide track bolt.

The passengers aboard the flight are also suing the manufacturer. The lawsuit claims that Boeing knowingly defrauded the FAA, the Department of Justice, and the public when it stated that it had changed its safety culture after the two deadly 737 MAX crashes, which killed 346 people combined.

As a result of the lawsuits and accusations, Boeing has reshuffled its board of directors and management. Dave Calhoun announced that he will step down at the end of the year. Board Chair Larry Kellner said he would not stand for re-election, and Steve Mollenkopf was appointed as the new chair. Finally, Stan Deal will retire, and Stephanie Pope is being named the Commercial Airplanes CEO.

Source: Simple Flying