American Airlines is planning to share with employees a portion of the compensation it expects to receive from Boeing for the nearly 10-month grounding of the 737 Max, a disruption that carriers have said cost them more than $1 billion in revenue.
American’s talks with Boeing are still ongoing, a spokesman said. Several other 737 Max customers, including Icelandair, Turkish Airlines and Southwest Airlines, have recently reached agreements with the manufacturer, but the final amounts, whether in cash compensation or discounts on aircraft, isn’t yet clear because the grounding is ongoing.
The grounding of the 737 Max after two crashes — one in Indonesia in October 2018 and another in Ethiopia the following March — has roiled Boeing, prompting the manufacturer to suspend production of the bestselling plane and costing former CEO Dennis Muilenburg his job. It has also forced airlines to cancel thousands of flights and curb growth plans. That has meant less overtime for employees, they argue.
The Federal Aviation Administration has repeatedly said it doesn’t have a set timeline for clearing the planes to fly again and that it would individually review each 737 Max before they can fly.
That uncertainty has forced airlines to repeatedly remove the jetliners from their schedule, a trend that becomes even more disruptive because airlines expected to have even more 737 Max planes delivered since the grounding. American had 24 of the 737 Max planes in its fleet at the time of the grounding and had expected that size to double this year.
“As we’ve said before, we expect American will be compensated for the lost earnings that the Max grounding has caused,” American Airlines spokesman Ross Feinstein said. “We anticipate that part of any compensation American receives will be eligible for profit sharing for our team.”
A Boeing spokesman said the company doesn’t comment on “our private discussions with customers.” The company took a $4.9 billion aftertax charge in the second quarter to compensate airlines for the grounding…