Alaska Air and Boeing Strike Financial Deal to Address Mid-Air Blowout Losses: A New Chapter in the 737 Max Crisis

Boeing has recently paid $160 million to Alaska Air to compensate for the financial losses suffered by the airline following a mid-air blowout in January. The money is intended to address the profits lost during the first three months of the year, with additional payouts expected in the future. The blowout led to the temporary grounding of nearly 200 Boeing 737 Max 9’s after a door plug fell from an Alaska Air plane shortly after take-off, resulting in flight cancellations and delivery delays for airlines.

The crisis has been affecting airlines worldwide as Boeing slows production of new planes to address manufacturing and safety concerns. Ryanair warned of potential fare increases due to delivery delays, while United Airlines asked pilots to volunteer for unpaid leave. Despite this, Alaska Air previously warned of a $150 million financial hit, but performance in February and March exceeded expectations despite the grounding of the 737-9 MAX.

Boeing anticipates spending at least $4 billion more than expected in the first three months of the year. An initial report from the US National Transportation Safety Board found that four bolts meant to attach the door securely to the aircraft had not been fitted. This incident has caused widespread concern about air safety and has resulted in increased scrutiny of Boeing’s manufacturing processes.

The crisis has also led to legal action from passengers aboard the plane who are now facing criminal investigations. Chief executive Dave Calhoun announced plans to step down by the end of the year, becoming one of many high-profile leaders leaving their positions as a result of this crisis.