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Alaska Air says Boeing issued $61 million in credit memos to address grounding hit

Published 05/03/2024, 07:46 AM
Updated 05/03/2024, 11:11 AM
© Reuters. Alaska Airlines commercial airplanes are shown parked off to the side of the airport in San Diego, California, Calinforia, U.S. January 18, 2024, as the the National Transportation Safety Board continues its investigation of the Boeing 737 MAX 9 aircraf
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(Reuters) - Alaska Air (NYSE:ALK) Group has received $61 million in supplier credit memos from Boeing (NYSE:BA) as additional compensation for the hit from a temporary grounding of 737 MAX 9 jets, the carrier said on Friday.

The airline had received $162 million in cash as compensation from the planemaker in the first quarter.

An Alaska Airlines-operated MAX 9 jet experienced a mid-air cabin panel blowout in January, which led to the U.S. Federal Aviation Administration grounding 171 of the aircraft for about three weeks.

The credit memos can be used to make future purchases at Boeing, Alaska said in its quarterly report on Friday.

© Reuters. Alaska Airlines commercial airplanes are shown parked off to the side of the airport in San Diego, California, Calinforia, U.S. January 18, 2024, as the the National Transportation Safety Board continues its investigation of the Boeing 737 MAX 9 aircraft.  REUTERS/Mike Blake/ File Photo

Boeing is also compensating United Airlines — a prominent customer — to address the financial damages related to the grounding.

The incident had forced United to temporarily suspend service on all 79 of its 737 MAX 9 aircraft, which resulted in a $200 million hit in the first quarter.

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