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Boeing Begins Compensation Agreements With Affected 737MAX Customers

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Boeing Begins Compensation Agreements With Affected 737MAX Customers

Boeing Begins Compensation Agreements With Affected 737MAX Customers
January 07
09:30 2020

LONDON – News from Reuters has stated that customers affected by the ongoing Boeing 737MAX crisis are now beginning to agree on compensation payouts.

Customer Announcements So Far…


American Airlines is so far the largest U.S airline to have become the latest carrier to reach such a settlement, with Aeromexico in Latin America currently in talks.

Neither carriers have disclosed the exact numbers, but on the American side, an extra $30 million will be handed into the profit-sharing pot for employees, so the figure must be substantial at this time.

Southwest Airlines also made settlement agreements last month due to the projected $830 million strike to operating income that the carrier has been subjected to in 2019 alone.

Across the pond, Turkish Airlines also revealed that last week, deals have been made but again have not specified any payment size.

The German subsidiary of TUI has said it is still in talks with Boeing currently, with no doubt a deal to be made over the next few months.

Boeing has not commented on any of the deals made with customers so far or about any of the ongoing talks either.

How Is Boeing Responding?


The financial squeeze that Boeing has experienced because of this crisis has seen it make the decision to suspend production of the MAX in the middle of this month.

An article in the Wall Street Journal suggests that Boeing is looking at raising more debt to strengthen its cash flow following the groundings of the aircraft.

This would look at elements such as the deferring of capital expenditures, freezing acquisitions and cutting spending on research and development.

This will ultimately cause further delays to deliveries, meaning that airlines will have to delay its growth to capacity, such as Ryanair, who have been quite reliant on its own variation of the MAX, the MAX200 Gamechanger.

No Word from the First Claimant? Norwegian!


Norwegian became the first customer in the world back in March 2019 to seek compensation over the crisis, with the carrier currently operating 18 units of the aircraft.

At that time, Norwegian’s spokeswoman Tonje Naess stated that it “should not have any financial burden for a brand new aircraft that will not be used”.

Former CEO Bjorn Kjos stated that his customers are the main priority and that operations had been put in place to merge flights together.

No further statements have been made by the airline so far.

Norwegian had to significantly merge operations together particularly in Ireland where Boeing 787-9 Dreamliners were offloaded to the likes of Shannon, Cork and Dublin to cope with the demand pressures.

What does the future hold for Boeing in 2020?


What we can see is that financially, Boeing is going to have to make cuts going into this very new year.

It will also have to repair significant relationships made with customers that span a few decades or maybe less, and encourage no further defections to Airbus with the A320neo Family.

How Boeing handles this now is very important. It must get the aircraft recertified, not just by the FAA in the U.S, but by the likes of EASA in Europe and Transport Canada (TC).

Without EASA and TC approval, the level of safety cannot be guaranteed and Boeing will continue to haemorrhage itself in the wake of a new decade.

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James Field

James Field

James is a passionate AvGeek based in Manchester, U.K who has been actively spotting for years. James has been an Aviation Enthusiast for 8 years and has a fond likening to Concorde! James hopes to grow in the aviation industry with journalism being his primary focus.

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