American Airlines reaches settlement with Boeing for 737 MAX compensation
INTERNATIONAL – American Airlines Group said on Monday that it had reached a confidential agreement with Boeing to address damages the airline incurred in 2019 due to the ongoing grounding of its fleet of Boeing 737 MAX aircraft.
American, the largest US airline, said the compensation would be received over several years. The airline will use more than $30 million of the compensation for the airline’s 2019 employee profit-sharing programme.
American said it did not expect any material financial impact of the agreement to be realised in its fourth-quarter 2019 earnings and it would continue talks regarding compensation for damages related to the MAX grounding beyond 2019.
The Association of Professional Flight Attendants, which represents American Airlines’ 28 000 flight attendants, said it welcomed the news about compensation, and was evaluating the details.
Boeing said it generally did not comment on discussions with airlines.
Boeing’s best-selling 737 MAX has been grounded since two fatal crashes in five months killed 346 people. The company is halting production this month. A number of airlines have struck confidential settlements with Boeing in recent weeks.
Boeing said it woud reassign 3 000 workers to other jobs as it halts production of the grounded best-selling 737 MAX jet in mid-January.
In an email to employees, Boeing said about 3 000 employees, mostly in manufacturing, engineering and fabrication, will be reassigned to other tasks. Most of those employees work at Boeing’s Renton, Washington plant where the 737 MAX is manufactured while some are at Boeing’s South Carolina operations.
Some staff will be reassigned to work on the 767 and 777/777X aircraft in Everett, Washington. Boeing has said it does not plan to lay off or furlough any workers as a result of the production halt.Reuters