Multiple 737 MAX operators agree on compensation settlements with Boeing

Aeromexico 737 MAX. Photo: © Boeing

American Airlines and Aeromexico have joined a growing list of airlines that Boeing has settled compensation cases with around the grounding of its 737 MAX aircraft.

The Boeing 737 MAX has been grounded since March 2019 following two fatal crashes, relating to design flaws in the latest generation of the 50 year old aircraft family. While the amount of compensation that Boeing will pay American has not been disclosed, the airline has stated that it will share $30 million of the sum with its employees. Aeromexico also remain tight lipped over the compensation they are due to receive from the Chicago based aerospace giant.

In addition to American Airlines and Aeromexico, Turkish Airlines has received a reported $225 million and Southwest Airlines (the type’s largest operator) have also agreed on a figure with Boeing. Southwest projected that the grounding will have an impact of $830 million for the year 2019.

American had 24 737 MAX aircraft in service at the time of the grounding (Southwest Airlines had 34) and since Boeing suspended deliveries of the aircraft type following the grounding, the compensation is to cover the delivery delays and the damage to the airlines schedules. The 737 MAX is part of many airlines’ fleet upgrade program, replacing older types like the McDonnell Douglas MD-80 which American retired in September 2019.

While Boeing aims to have the 737 MAX back in the sky in March, continued issues with the program mean that such a target looks set to slip further, with United Airlines even removing the MAX from it’s schedule up until June 4th 2020. Given the 737 is the company’s best selling aircraft of all time, with a backlog of over 4,000 MAX orders, we can expect the compensation figures to continue to rise as more airlines receive their settlements over lost profits due to the grounding and delayed deliveries.

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