Southwest to share Boeing settlement for 737 MAX grounding with employees
Southwest Airlines Co. LUV, -1.66% said Thursday it has reached a settlement with Boeing Co. BA, +0.60% over the grounding of its 737 Max fleet totaling about $125 million and that it will share the money with its employees. The sum is the projected reduction in operating profit caused by the groundings, which came after two fatal crashes involving the aircraft.
Southwest is still in talks with Boeing regarding compensation for the groundings. The company is expecting to account for most of the compensation as a reduction in the cost of existing and future firm aircraft orders, lowering its depreciation expense in future years. The Boeing 737 Max fleet has been grounded since an order from the Federal Aviation Administration on March 13. Southwest shares were not active premarket, but have gained 16% in 2019, while the S&P 500 SPX, +0.
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