The financial impact of grounding its 65 Boeing 737 Max 9s in January pushed Alaska Air Group to a $132 million loss in the first quarter of 2024.
“Air Group’s first-quarter operation and results were significantly impacted by Flight 1282 in January and the Boeing 737-9 Max grounding, which extended into February,” Alaska said in disclosing its first-quarter financial results on 18 April.
Alaska Air Group, parent to Alaska Airlines, says it already received $162 million from Boeing as compensation for the grounding.
“Despite significant challenges to start the year our results have far exceeded initial expectations,” adds Alaska’s chief executive Ben Minicucci. “We are well positioned to carry our strong performance into the second quarter and beyond.”
On 5 January, a mid-cabin door plug blew out of an Alaska 737 Max 9, leaving a hole in the side of the fuselage and prompting the Federal Aviation Administration to ground Max 9s with those plugs.
Alaska parked its 65 Max 9s and cancelled 110-150 flights daily during the grounding, which lasted several weeks. A preliminary report from the National Transportation Safety Board suggests Boeing workers never bolted the plug to the fuselage prior to delivering the jet to Alaska.
Alaska Air Group’s $132 million first-quarter loss compares to its $142 million loss in the same period last year.
Alaska generated operating revenue in the first quarter of $2.2 billion, up about 2% year-on-year, while its operating expenses in the quarter inched up 1% year on year to $2.4 billion.
Alaska’s cost per available seat mile excluding fuel costs jumped 11% year on year in the first quarter.
During the quarter, Alaska and Hawaiian Airlines agreed to a deal under which Alaska plans to acquire Hawaiian for $18 per share, or about $1 billion.
