Boeing agrees to help Icelandair cover 737 MAX expenses

Sep 23, 2019

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.

Boeing and Icelandair have reached an agreement regarding the airline’s grounded Boeing 737 MAX planes. Boeing has agreed to pay the airline an undisclosed amount to help cover expenses the airline is incurring while the plane is grounded worldwide.

Icelandair’s statement says the current grounding has cost the airline around $140 million (~£112 million) so far. The agreement reached with Boeing will cover a “fraction” of that, according to the airline’s statement:

“As previously announced, the suspension of Icelandair’s Boeing 737-MAX aircraft has had negative financial effects on the Company…The Company has also previously announced that it has started discussions with Boeing regarding compensation for all the financial loss resulting from the suspension.

Icelandair has reached an interim agreement with Boeing regarding compensation which covers a fraction of the Company’s total loss due to the suspension of the Boeing 737-MAX aircraft…Icelandair Group will continue its discussions with Boeing regarding compensation due to the financial effects of the Boeing 737-MAX suspension.”

This agreement is one of the first of its kind, helping to cover costs incurred due to the grounding of the newest version of the company’s narrow-body workhorse.

Boeing expects to take a $5.6 billion hit due to the 737 MAX grounding, it said in a statement. Costs include having to compensate airlines such as Icelandair that fly the aircraft. Boeing has not factored in the $100 million (~£80 million) it will be paying to crash victims’ families and costs from any potential lawsuits.

Icelandair has a total of six of the Boeing 737 MAX in its fleet with another three on order from Boeing.

Sign up for the free daily TPG newsletter for more travel tips!

Featured Photo by Pall Jokull for Icelandair/The Brooklyn Brothers via Getty Images

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.