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Boeing paid Alaska Airlines $160M in compensation after door plug incident, airline says

Written by ABC AUDIO ALL RIGHTS RESERVED on April 4, 2024

(NEW YORK) — Boeing has paid Alaska Air Group approximately $160 million in compensation following the door plug incident on Alaska flight 1282, according to an SEC filing from the carrier.

Alaska said the money is “initial compensation” from Boeing “to address the financial damages incurred as a result of Flight 1282 and the 737-9 MAX groundings,” the filing stated.

The airline said as a result of the incident, it lost approximately $160 million in first-quarter pretax profit — “primarily comprising lost revenues, costs due to irregular operations, and costs to restore our fleet to operating service,” the filing, dated Thursday, stated.

Alaska also said additional compensation is expected from Boeing, the terms of which are confidential, according to the filing.

In response to a request for comment, Boeing referred ABC News to comments made by its CFO, Brian West, at a conference last month where he said there is going to 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 said at the Bank of America Industrials Conference on March 20.

The door plug of Alaska Airlines flight 1282 fell off a few minutes after take off from Portland International Airport on Jan. 5. Passengers captured footage showing a hole where the door plug came loose on the Boeing 737 Max 9 plane. The plane safely made an emergency landing and no one was seriously injured.

The Federal Aviation Administration grounded approximately 171 Max 9s worldwide following the incident. Alaska resumed flying the Boeing 737 Max 9 following fleet inspections on Jan. 26.

A National Transportation Safety Board preliminary report released in February found that four bolts designed to prevent the door plug from falling off the Boeing 737 Max 9 plane were missing before the flight.

The incident remains under investigation by the NTSB. The Department of Justice has also launched a probe.

The FAA increased its oversight of Boeing and began an audit of the company’s production and manufacturing in the wake of the door plug blow-out.

Amid the fallout of the door plug failure, Boeing announced last week that its CEO, Dave Calhoun, will step down at the end of the year.

“The eyes of the world are on us, and I know that we will come through this moment a better company,” Calhoun said in a statement last week. “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.”