Alaska Airlines receives ‘initial’ $160M from Boeing after mid-flight panel blowout — additional compensation ‘expected’



Boeing paid Alaska Airlines $160 million following the mid-flight door panel blowout incident that occurred earlier this year, the airline stated on Thursday.

In a recent United States Securities and Exchange Commission filing, Alaska Airlines reported that Boeing provided the "initial compensation ... to address the financial damages incurred as a result of Flight 1282 and the 737-9 MAX groundings."

In January, Flight 1282 experienced a mid-air door panel blowout that forced the plane to make an emergency landing. Multiple investigations were launched as a result of the incident. The Federal Aviation Administration briefly grounded 171 Max 9 airplanes while inspections were underway, causing thousands of flight cancelations.

A preliminary report from the National Transportation Safety Board found that all four bolts designed to secure the panel in place were missing from the aircraft. Records revealed that before the plane was delivered to Alaska Airlines, it underwent rivet repairs that required the panel to be temporarily removed and reinstalled upon completion. The repair work was completed by Spirit AeroSystems, a former Boeing subsidiary, before the aircraft was returned to Boeing's Renton, Washington, facility.

The NTSB continues to investigate the incident. The Department of Justice also launched its own investigation.

Alaska Airlines' SEC filing stated that the company lost approximately $160 million in the first quarter of 2024 due to the mandatory grounding of some of its Boeing planes.

"As a result of the Flight 1282 accident and the Boeing 737-9 MAX grounding, we lost approximately $160 million in Q1 pretax profit, primarily comprising lost revenues, costs due to irregular operations, and costs to restore our fleet to operating service," the airline wrote.

Boeing paid Alaska Airlines the compensation in cash during the first quarter.

"This cash payment is equivalent to the lost profits resulting from the accident and grounding in Q1 2024. Additional compensation is expected to be provided beyond Q1, the complete terms of which are confidential," it added.

Boeing referred to statements made last month by CFO Brian West when contacted for comment, ABC News reported. During the Bank of America Industrials Conference, West remarked that there will be "customer consideration that is going to manifest itself in the quarter."

"We've got to take care of that and we're well down the road to do that. And we continue to stand behind our customers with that responsibility," West added.

The mid-flight panel blowout ignited a safety scandal for Boeing, prompting a management shake-up. In February, Boeing removed Ed Clark, the head of its 737 Max program. In March, it announced that CEO Dave Calhoun would leave the company at the end of the year. Boeing Commercial Airplanes CEO Stan Deal announced his immediate retirement last month. Larry Kellner, board chairman, is set to resign and not seek re-election in May.

Last week, Calhoun stated, "The eyes of the world are on us, and I know that we will come through this moment a better company."

"We will remain squarely focused on completing the work we have done together to return our company to stability after the extraordinary challenges of the past five years, with safety and quality at the forefront of everything that we do," he said.

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Texas AG Paxton demands info on DEI practices as part of new probe into Boeing parts supplier



Texas Attorney General Ken Paxton (R) launched an investigation into Spirit AeroSystems, a Boeing parts supplier, over “reoccurring issues with certain airplane parts,” according to a Sunday press release from the AG’s office.

Spirit AeroSystems, a former Boeing subsidiary, manufactures the fuselages for Boeing’s 737 airplanes, the same aircraft that experienced a mid-flight door panel blowout earlier this year that led to a massive safety scandal.

“On certain models of the 737, apparent manufacturing defects have led to numerous concerning or dangerous incidents, some of which occurred in-air,” the office’s press release read.

As a part of the newly launched investigation, Paxton is requesting “a variety of documents relevant to manufacturing defects” from Spirit.

“The company must release documents related to its diversity, equity, and inclusion (‘DEI’) commitments and whether those commitments are unlawful or are compromising the company’s manufacturing processes,” the AG’s office stated.

The AG’s Request to Examine letter demands that Spirit produce various documents, including the company’s communications with investors and Boeing regarding the “Mis-Drilled Aft Pressure Bulkhead Holes Defect in Spirit’s products.”

The company also must turn over meeting notes concerning its “Global Diversity & Inclusion Council(s)” and documents it uses to “substantiate its claim that a diverse workplace improves product quality and/or ‘enhance[s] performance’ and/or ‘helps [Spirit] … make better decisions.’

Paxton also requested the personnel file for Joshua Dean, the first whistleblower to sound the alarm on Spirit’s alleged quality control issues. Dean was fired last year for allegedly failing to conduct inspections, the Seattle Times reported. The AG is seeking information and documents concerning Dean’s termination.

Paxton said, “The potential risks associated with certain airplane models are deeply concerning and potentially life-threatening to Texans.”

“I will hold any company responsible if they fail to maintain the standards required by the law and will do everything in my power to ensure manufacturers take passenger safety seriously,” he noted.

As a result of Boeing’s safety scandal following the Alaska Airlines Flight 1282 incident in January, the company announced a management shake-up. In February, Boeing removed Ed Clark, the head of its 737 Max program. CEO Dave Calhoun will leave the company at the end of the year, Boeing announced in March. At the same time, Boeing Commercial Airplanes CEO Stan Deal announced his immediate retirement. Larry Kellner, board chairman, is set to resign and not seek re-election in May.

The National Transportation Safety Board told the Senate Commerce Committee in March that Boeing was “unable to find records” for repairs made to the airplane that experienced the mid-flight panel blowout. The aircraft underwent rivet repairs before it was delivered to Alaska Airlines. Spirit reportedly conducted the repairs, which required the door panel to be temporarily removed and reinstalled upon completion. The agency’s preliminary report found that the door panel was missing all four bolts designed to hold it in place.

Spirit did not respond to a request for comment from Fox Business.

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Boeing CEO, top executives to step down amid safety scandal



Boeing announced that CEO Dave Calhoun and other top executives will step down as part of a management shake-up prompted by safety and quality concerns over a mid-flight door panel blowout earlier this year, CNBC News reported.

Calhoun told Boeing employees on Monday that he would leave the company at the end of 2024.

"As you all know, the Alaska Airlines Flight 1282 accident was a watershed moment for Boeing," Calhoun wrote. "We must continue to respond to this accident with humility and complete transparency. We also must inculcate a total commitment to safety and quality at every level of our company."

"The eyes of the world are on us, and I know we will come through this moment a better company, building on all the learnings we accumulated as we worked together to rebuild Boeing over the last number of years," Calhoun added.

He told CNBC that the decision to step down was "100%" his own.

Calhoun took over the position in January 2020 after two plane crashes — one in 2018 and another in 2019 — prompted the company's board to fire his predecessor, Dennis A. Muilenburg. The crashes, which killed all on board, were caused by issues with the planes' flight stabilization feature.

Boeing Commercial Airplanes CEO Stan Deal also retired from the company, effective immediately, amid the management overhaul. He has been replaced by Stephanie Pope, Boeing's chief operating officer.

Additionally, the chairman of the board, Larry Kellner, will resign and not seek reelection in May. Steve Mollenkopf, a Boeing director, will replace Kellner and lead the board in selecting a new CEO.

In February, Deal told NBC News that the manufacturer had removed Ed Clark, the head of its 737 Max program. Clark managed Boeing's Renton, Washington, facility where the assembly of the Alaska Airlines plane involved in the January mid-flight panel blowout was assembled. At the time, Deal called the management reshuffling part of Boeing's "enhanced focus on ensuring that every airplane we deliver meets or exceeds all quality and safety requirements."

The National Transportation Safety Board informed the Senate Commerce Committee earlier this month that Boeing is "unable to find records" for repairs made to the airplane that experienced the panel blowout. Before delivering the aircraft to Alaska Airlines, the plane underwent rivet repairs, which required the door panel to be temporarily removed.

"To date, we still do not know who performed the work to open, reinstall, and close the door plug on the accident aircraft," NTSB Chair Jennifer Homendy wrote in a letter to senators. "Boeing has informed us that they are unable to find the records documenting this work."

Boeing has repeatedly stated that it is cooperating with the NTSB's investigation into the incident.

"With respect to documentation, if the door plug removal was undocumented there would be no documentation to share," Boeing said.

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