Turkish Airlines reaches compensation deal with Boeing; others in queue

This is the second compensation agreement reached by Boeing in the past one month over the grounding of its 737 Max aircraft.

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Turkish Airlines has reached an agreement for compensation with Boeing over the grounding of its 737 Max aircraft. The announcement was made by the airline company at the Istanbul stock exchange, although it didn't share the specific figure of compensation. This is Boeing's second compensation deal in the past one month.

The aircraft maker had reached a similar compensation deal with Southwest Airlines in December over the grounding of 737 Max, following two fatal crashes in 2019. Boeing continues to bleed, with a number of airline companies now initiating talks to reach a compensation deal with the aircraft maker for the losses being incurred by them owing to the grounding of 737 Max planes across the world.

More into the compensation

Turkish Airlines
Turkish Airlines Pixabay

It was reported in December that Turkish Airlines was contemplating moving court over the losses suffered because of Boeing. However, it now seems that both parties have amicably reached a compensation deal. Although the compensation amount couldn't be confirmed, Turkey's Hurriyet reported that compensation deal is around $225 million, which includes $150 million in compensation and another $75 million for spare parts and training.

Turkish Airlines has a total of 24 Boeing 737 Max aircraft, one of the highest by any airline company in the world. The airline company had taken deliveries of 12 737 Max aircraft of the 75 it had ordered. However, the decision to ground the aircraft came in between. This stalled the deliveries of another 12 aircraft.

Boeing continues to incur losses

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Boeing's sufferings have only increased over the months. The company's 737 Max aircraft across the world remain grounded since March following two fatal crashes in Indonesia and Ethiopia that killed 346 people. Boeing since then has been reeling under pressure. According to analysts, the total losses suffered by Boeing's customers across the globe could be ascertained only after the aircraft comes back to service.

However, that isn't likely to happen anytime soon. In December, the Federal Aviation Administration made t clear that it will take it own time to investigate the aircraft, which makes it evident that Boeing's expectations of an early return of the aircraft to service looks bleak. It is estimated that it has cost Boeing around $9 billion so far following the crashes.

Not only Turkish Airlines, over the past few months a number of airline companies have started pushing Boeing for coming to a compensation agreement. Last month, Boeing reached a confidential agreement with Southwest Airlines for a part of the estimated $830 million loss incurred by the airline company. Also, European charter airline TUI on Tuesday said that is still in talks with Boeing for a compensation package. A number of other airlines too are in similar stages.