American Airlines says it has reached a confidential compensation agreement with Boeing for financial damages caused by the grounding of the 737 Max aircraft.
The Max has been grounded for nearly a year following two fatal accidents in which 346 people were killed.
American Airlines was one of a number of carriers that made the decision to cancel some flights due to be operated by the aircraft rather than finding other planes to fly. This has led to around 140 flights a day to be cancelled through to 6 April 2020.
The carrier said it believes the 737 Max will return to service on 7 April.
In a statement, the airline said it would contribute money from the settlement to its team members’ 2019 profit-sharing scheme, based on estimated full-year damages for the Max groundings.
Chairman and CEO Doug Parker commented: “Despite the ongoing challenges the grounding has brought, American Airlines team members continue to do an incredible job caring for our customers. Our ability as an airline to weather these unprecedented times is thanks to our phenomenal team, and it was important to us that we get a deal done before the end of the year. On behalf of the board of directors, we are proud to take the step of including this compensation in our 2019 profit-sharing programme, even though the compensation will be received over several years.”
The airline said it will continue conversations with Boeing regarding any compensation relating to financial damages beyond 2019, with no official estimate in sight for the Max’s return to service.
Boeing replaced Dennis Muilenburg as CEO at the end of the year as the company seeks to restore trust with airlines and the flying public following the 737 Max disasters. Production of the aircraft has been temporarily suspended while the manufacturer deals with a backlog of deliveries.
The company is likely to face compensation claims from a number of its airline customers, with a group of Chinese carriers saying last year that they would demand a pay-out for financial damages.