American Airlines announced Monday that after reaching a confidential settlement with Boeing for 2019 financial damages related to the Boeing 737 MAX grounding, they will contribute additional funds to the company’s profit sharing plan.
Today, American Airlines’ team members received good news as the company announced that they have reached a confidential settlement with Boeing for 2019 financial damages related to the continued Boeing 737 MAX grounding. The airline will contribute an additional accrual of over $30M to their 2019 profit-sharing total, which will be payable to all eligible team members in March 2020. Commenting on Monday’s announcement, American Airlines’ Chairman and Chief Executive Officer, Doug Parker said,
“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 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 program, even though the compensation will be received over several years.”
American Airlines doesn’t expect any material financial impact of the settlement agreement of their fourth quarter earnings. The company expects to account for most of the compensation on a cost reduction basis for grounded aircraft and future MAX deliveries. Negotiations for future settlements related to the MAX grounding are ongoing and the company has indicated that they will also share future settlement funds with eligible team members.
Source: American Airlines