Southwest Airlines Shares the ‘LUV’ With Employees, Carrier to Distribute Boeing Settlement Funds
Southwest Airlines announced Thursday that they would share settlement funds related to the Boeing 737 MAX with their employees. Although the terms of the airline’s settlement with are confidential, the airline will contribute $125M to the employee profit-sharing plan.
Today, Southwest Airlines announced that they have recently reached a confidential settlement with Boeing for a portion of financial damages related to the continued Boeing 737 MAX grounding. As a result of the settlement, the Southwest Board of Directors has authorized a discretionary incremental employee profitsharing accrual valued at $125M. The profitsharing award will be included as part of the Company’s annual 2019 profitsharing distribution in 2020. Southwest will provide details in early 2020 about what percentage each eligible employee will receive. In Thursday’s announcement, Southwest Airline’s Chairman of the Board and Chief Executive Officer, Gary C. Kelly said,
“Our People have done an incredible job managing through the MAX groundings, while providing the highest levels of Customer Service and one of the best operational performances in in our history. On behalf of the Southwest Board of Directors, we are grateful to our Employees for their extraordinary efforts throughout the year and are pleased to share proceeds from our recent agreement with Boeing.”
As the Boeing 737 MAX groundings continue, discussions between Southwest and Boeing are ongoing. The details of current and future settlements are confidential, but the airline expects to receive “substantially all” of the compensation in the form of cost reductions on current and future aircraft orders. Southwest continues to monitor information from Boeing and the FAA on the 737 MAX software enhancements and training requirements, but expressed confidence in a safe return to service once the aircraft is recertified.
Source: Southwest Airlines