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Southwest Still in Talks with Boeing Over Estimated 737 MAX Damages

Southwest Airlines stated Thursday it had reached a confidential compensation deal with Boeing for a part of an estimates $830…

By Luann Reagan , in Industry Updates News , at December 13, 2019 5:36 AM EST Tags: , ,

Southwest Airlines stated Thursday it had reached a confidential compensation deal with Boeing for a part of an estimates $830 million hit to operating income this year arising from the grounding of its 737 MAX planes.

The airline, the world’s largest 737 MAX fleet operator, said it might share with its employees proceeds of around $125 million from Boeing.

Southwest said it’s still in talks with Boeing on compensation associated with the MAX grounding, adding that the details of the discussions and the settlement had been confidential. Boeing declined to make an immediate comment.

Southwest, American Airlines Group and United Airlines Holdings are scheduling flights without the use of the plane until early March 2020, practically a year since the aircraft was grounded after accidents killed 346 people in Ethiopia and Indonesia.

Federal Aviation Administration (FAA) chief Steve Dickson confirmed Wednesday the company would not unground the MAX before the end of this year.

Speaking at a Wings Club event, Southwest Chief Gary Kelly said the March date was based on FAA approval in December and would likely be pushed back again.

American and United remain in talks with Boeing about compensation. American has 24 MAX planes and had anticipated 40 by the end of this year. American has stated it expects to be paid by Boeing.

With its 34 MAX jets parked and 41 more expected in 2019 still pending delivery, Southwest has scaled back progress plans and canceled over100 daily flights.

Once the jets are flying again, Kelly stated he has a clear route strategy with plans to support service to Denver, Houston, and Baltimore. The carrier introduced flights to Hawaii this year.