Boeing 737 Max 9 grounding will cost Alaska Airlines $150M
Last Updated on January 26, 2024 by Admin
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Alaska Airlines said Thursday the grounding of its Boeing 737 Max 9 fleet will cost it $150 million and affect its ability to grow capacity.
In a filing with the Securities and Exchange Commission, the carrier said it now expects full-year 2024 adjusted earnings per share to be between $3 and $5 as its fleet of 65 planes gradually returns to service through early February. Before the aircraft was grounded, Alaska expected 2024 full-year capacity to grow 3% to 5% — it now expects growth to be at or below the lower end of that range.
Earlier this week, United Airlines announced it was also taking a financial hit due to the Federal Aviation Administration (FAA)’s temporary grounding of Boeing’s 737 Max 9 planes with door plugs. United expects all 79 of its Max 9 fleet to remain grounded through the end of January, resulting in an adjusted loss of between 35 cents and 85 cents per share.
In total, 171 planes were grounded almost immediately after a 737 Max 9 operated by Alaska Airlines lost a door plug panel midflight earlier this month in Portland, Oregon, forcing Alaska and United to cancel hundreds of flights over a prolonged period of time.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ALK | ALASKA AIR GROUP INC. | 37.40 | +1.56 | +4.35% |
| UAL | UNITED AIRLINES HOLDINGS INC. | 42.96 | +2.12 | +5.19% |
On Wednesday, more than two weeks after the incident occurred, the FAA approved a thorough inspection and maintenance process for the aircraft, which is the first step in paving the way for carriers to return the planes to service.
Investigators are examining the door plug that blew out of an Alaska Airlines flight. It remains unclear if the panel was properly bolted. (NTSB / Fox News)
Alaska said it’s ready to perform these detailed inspections, which are slated to take up to 12 hours for each plane. It anticipates bringing the first few planes back into its scheduled commercial service as soon as Friday.
ALASKA AIRLINES, BOEING SUED BY PASSENGERS ON PLANE WHEN DOOR FLEW OFF MID-FLIGHT
The FAA said that after each of the 171 planes successfully completes the enhanced maintenance and inspection process, “the door plugs on the 737-9 MAX will be in compliance with the original design which is safe to operate.”
A plastic sheet covers an area of the fuselage of the Alaska Airlines Boeing 737 Max 9 aircraft outside a hangar at Portland International Airport in Oregon on Jan. 8. (Mathieu Lewis-Rolland / Getty Images)
However, the FAA added that “this aircraft will not operate until the process is complete and compliance with the original design is confirmed.”
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The FAA is still in the midst of investigating Boeing and its manufacturing practices and production lines, including those involving subcontractor Spirit AeroSystems.
The FAA also made it clear that the agency won’t agree to any request from Boeing for an expansion in production or approve additional production lines for the 737 Max until it is “satisfied that the quality control issues uncovered during this process are resolved.”
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