Alaska Airlines receives ‘initial’ $160M from Boeing after mid-flight panel blowout — additional compensation ‘expected’

Boeing paid Alaska Airlines $160 million following the mid-flight door panel blowout incident that occurred earlier this year, the airline stated on Thursday.

In a recent United States Securities and Exchange Commission filing, Alaska Airlines reported that Boeing provided the "initial compensation ... to address the financial damages incurred as a result of Flight 1282 and the 737-9 MAX groundings."

In January, Flight 1282 experienced a mid-air door panel blowout that forced the plane to make an emergency landing. Multiple investigations were launched as a result of the incident. The Federal Aviation Administration briefly grounded 171 Max 9 airplanes while inspections were underway, causing thousands of flight cancelations.

A preliminary report from the National Transportation Safety Board found that all four bolts designed to secure the panel in place were missing from the aircraft. Records revealed that before the plane was delivered to Alaska Airlines, it underwent rivet repairs that required the panel to be temporarily removed and reinstalled upon completion. The repair work was completed by Spirit AeroSystems, a former Boeing subsidiary, before the aircraft was returned to Boeing's Renton, Washington, facility.

The NTSB continues to investigate the incident. The Department of Justice also launched its own investigation.

Alaska Airlines' SEC filing stated that the company lost approximately $160 million in the first quarter of 2024 due to the mandatory grounding of some of its Boeing planes.

"As a result of the Flight 1282 accident and the Boeing 737-9 MAX grounding, we lost approximately $160 million in Q1 pretax profit, primarily comprising lost revenues, costs due to irregular operations, and costs to restore our fleet to operating service," the airline wrote.

Boeing paid Alaska Airlines the compensation in cash during the first quarter.

"This cash payment is equivalent to the lost profits resulting from the accident and grounding in Q1 2024. Additional compensation is expected to be provided beyond Q1, the complete terms of which are confidential," it added.

Boeing referred to statements made last month by CFO Brian West when contacted for comment, ABC News reported. During the Bank of America Industrials Conference, West remarked that there will be "customer consideration that is going to manifest itself in the quarter."

"We've got to take care of that and we're well down the road to do that. And we continue to stand behind our customers with that responsibility," West added.

The mid-flight panel blowout ignited a safety scandal for Boeing, prompting a management shake-up. In February, Boeing removed Ed Clark, the head of its 737 Max program. In March, it announced that CEO Dave Calhoun would leave the company at the end of the year. Boeing Commercial Airplanes CEO Stan Deal announced his immediate retirement last month. Larry Kellner, board chairman, is set to resign and not seek re-election in May.

Last week, Calhoun stated, "The eyes of the world are on us, and I know that we will come through this moment a better company."

"We will remain squarely focused on completing the work we have done together to return our company to stability after the extraordinary challenges of the past five years, with safety and quality at the forefront of everything that we do," he said.

Like Blaze News? Bypass the censors, sign up for our newsletters, and get stories like this direct to your inbox. Sign up here!