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Boeing Shells Out $160M to Alaska After Door Plug Blowout

The aircraft manufacturing is expected to pay more, but the terms are confidential.

An Alaska Airlines 737 MAX 9. (Photo: AirlineGeeks | Katie Zera)

Alaska Airlines told investors in a Securities and Exchange Commission (SEC) filing that it received about $160 million from Boeing in “initial compensation” after a door plug blew off a 737 MAX 9 during a January flight.

The Q1 money makes up for financial damages caused by the Alaska flight 1282 incident and subsequent 737 MAX 9 groundings, the filing says. All 737 MAX 9 aircraft were grounded by the Federal Aviation Administration (FAA) after a door-plug panel blew off the aircraft during the flight from Portland to Ontario on Jan. 5.

Boeing is expected to pay more money, but the terms are confidential, the filing says.

Alaska’s operation was significantly impacted by the incident. The airline projects its Q1 adjusted pretax profit would have improved approximately 80% over Q1 2023 if the incident hadn’t occurred. Instead, the airline lost $160 million after the incident due to lost revenue, irregular operations, and restoring its fleet.

Still, February and March finished above the airline’s original pre-grounding expectations due to network adjustments, strong demand, and continued recovery of West Coast business travel.

“As a result of our revised accounting treatment, Q1 adjusted loss per share will not include the Boeing compensation, and is expected to be approximately ($1.15) to ($1.05). This reflects approximately ($0.95) cents of lost earnings due to Flight 1282 and the 737-9 MAX grounding lost profits,” the filing says.

Brinley Hineman

Author

  • Brinley Hineman

    Brinley Hineman covers general assignment news. She previously worked for the USA TODAY Network, Newsday and The Messenger. She is a graduate of Middle Tennessee State University and is from West Virginia. She lives in Brooklyn with her poodle Franklin.

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