Boeing
A Boeing 737 MAX 9 in United Airlines livery.

Boeing Compensates Airlines for 737 MAX Groundings

April 23, 2024
United Airlines and Alaska Airlines have made confidential settlements with the jet builder over financial damages incurred by loss of service and delayed deliveries of future aircraft.

United Airlines reached an agreement with Boeing Co. on compensation for financial damages related to the grounding of the carrier’s 737 MAX 9 jets during January of this year, as well as for damages involving delivery delays for the Boeing 737 MAX 10 jets. The terms of both agreements are confidential but were reported in a Q1 filing by United with the federal Securities and Exchange Commission.

The compensation will be made by way of Boeing crediting the airline on future jet purchases.

United Airlines is among Boeing’s largest customers, with 776 Boeing aircraft in service now and nearly 500 more jets on order. It is the largest operator of the 737 MAX 9 aircraft, with 79 in service and 144 more on order.

And United is due to be the launch customer for the delayed 737 MAX 10, with 167 on order.

Previously a filing by Alaska Airlines revealed that Boeing made a $160-million cash payment to that carrier – which was the operator of the Boeing aircraft involved in the mid-flight door-plug failure on January 5 that led the Federal Aviation Administration to ground the 737 MAX 9 series for about a month.

Alaska Airlines also noted in its Q1 filing that further compensation from Boeing is expected in subsequent quarters.

The January incident resulted in no serious injuries, but Boeing’s 737 MAX manufacturing program is under close evaluation by the company and the FAA to determine likely causes and how those may be resolved. The oversight as well as ongoing supply chain problems have significantly reduced Boeing’s productivity, delaying aircraft assembly and deliveries of jets to customers.

However, in addition to the confidential disclosure regarding the compensation Alaska Airlines issued a statement confirming it is committed to working with Boeing – which has supplied 228 aircraft to the airline, plus four Boeing cargo aircraft, and is due to supply 132 more jets to Alaska.

Other carriers with large numbers of 737 MAX in service or on order include Southwest Airlines and RyanAir.

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