Boeing pays $160 million to Alaska Airlines over January door-plug incident

The airplane manufacturer’s cash disbursement to Alaska Airlines was an initial payment to make up for the equivalent of its losses in “Q1 pretax profit, primarily comprising lost revenues, costs due to irregular operations, and costs to restore our fleet to operating service,” according to an SEC filing by the airline Thursday.

Alaska Airlines said Boeing’s multimillion-dollar payment was just the beginning and “additional compensation is expected to be provided beyond Q1,” although it didn’t disclose how much or when.

Following the door-plug incident in January, Alaska Airlines grounded its fleet of 65 Boeing 737-9 Max airplanes. The Federal Aviation Administration later temporarily grounded more than 170 of the planes across airlines as the National Transportation Safety Board launched an investigation. Most are now back in service.

Following the door-plug incident, a string of failures with components of Boeing planes attracted the ire of its customers and scrutiny from regulators. Last month, the company’s CEO, Dave Calhoun, said he would step down at the end of the year.

Boeing still has work to do before it can regain its customers’ trust. Alaska Airlines’ CEO, Ben Minicucci, said in an interview following the January incident that he was “angry” at Boeing and demanded it improve its manufacturing process. Minicucci added that an inspection by the FAA found that many of the airline’s grounded 737-9 Max planes had “loose bolts.” 

Another airline and one of Boeing’s biggest customers, United, has said it may ask its pilots to take unpaid time off next month because Boeing is so late in delivering its new planes. The airline’s CEO had previously said he was “disappointed” with Boeing and was looking to its Europe-based rival Airbus as an alternative.

Meanwhile, Boeing is looking for a new CEO to right the ship as its stock faces a 27% collapse since the start of the year.