US carrier Alaska Airlines has received an additional $61 million in credits from Boeing as compensation for the mid-flight blow-out of a door plug on Alaska flight 1282 and subsequent grounding of its 737 Max 9s.
The credits come on top of the $162 million cash payment Alaska received from Boeing in the first quarter.
Seattle-headquartered Alaska Air Group disclosed the “supplier credit memos” in a 3 May regulatory filing, adding that the credits will be used for future purchases of Boeing products.
“Compensation received under the agreement is accounted for as a reduction in cost basis of certain [Max 9] aircraft,” Alaska says.
Alaska voluntarily grounded all 65 of its Max 9s following the 5 January accident on a flight bound for Southern California from Portland, Oregon – an event that has reverberated across the airline industry. The Federal Aviation Administration subsequently ordered most of the global fleet of Max 9s out of service, prompting another crisis for Boeing’s next-generation narrowbody programme and an overhaul of the company’s management team.
The jets were out of service through early February, tarnishing the financial results of an otherwise strong first quarter for Alaska, with United Airlines reporting a similar impact.
Also in the filing, Alaska discloses that it has spent $8 million on its acquistion of Hawaiian Airlines and expects to “continue to incur integration costs as activities supporting the proposed acquisition continue”.
The $1.9 billion deal has drawn a private lawsuit from a consumer group that argues Alaska’s deal to acquire Hawaiian violates US antitrust law by lessening competition in certain US airline markets – and potentially harming the island state’s $20 billion tourism economy.
”The company believes the allegations in the complaint are without merit and will defend against them vigorously, while continuing to work cooperatively with the US Department of Justice to obtain regulatory clearance to close the acquisition,” Alaska says.
Its proposed acquisition of Hawaiian is under review by the DOJ, which has not yet indicated whether it will take action to block the deal.
