Boeing Compensates Alaska Air with $160 Million After Mid-Air Blowout Incident
Boeing has compensated Alaska Air with a hefty sum of $160 million to address the losses incurred by the airline following a harrowing mid-air blowout incident in January. The payment aims to cover the profits lost by Alaska Air during the first quarter of the year, with expectations of further payouts in the coming months as the airline continues to grapple with the aftermath of the incident.
The dramatic mid-air blowout incident, which occurred when a door plug fell from an Alaska Air Boeing 737 Max 9 shortly after take-off, prompted regulators to ground nearly 200 Boeing 737 Max 9 jets temporarily. This led to the cancellation of thousands of flights and significantly impacted Alaska Air’s operations and financial performance.
While Alaska Air welcomes the financial compensation from Boeing, not everyone is pleased with the arrangement. A law firm representing some of the passengers involved in the incident has criticized Boeing’s priorities, suggesting that the focus should be on compensating those whose lives were endangered rather than solely addressing corporate profits.
Boeing’s troubles extend beyond its dealings with Alaska Air, as the company grapples with manufacturing and safety concerns that have led to production delays and financial repercussions. The slowdown in new plane production has prompted warnings from airlines like Ryanair, which cautioned of potential fare increases due to delivery delays.
The financial impact of the Boeing 737 Max 9 grounding has been significant for various airlines, including United Airlines, which recently sought voluntary unpaid leave from its pilots in response to delivery changes. Despite experiencing some recovery in February and March, Alaska Air had initially projected a substantial hit of around $150 million due to the incident.
Boeing, while refraining from commenting specifically on the compensation to Alaska Air, had previously anticipated additional expenses of at least $4 billion in the first quarter of the year. The company continues to face scrutiny and legal challenges related to the mid-air blowout incident, including a criminal investigation and legal action from affected passengers.
The incident has also had leadership implications for Boeing, with CEO Dave Calhoun announcing plans to step down by the end of the year, marking a significant development in the ongoing crisis faced by the aerospace giant.
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