Boeing agrees to help Icelandair cover 737 MAX expenses

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 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 it will be paying to crash victims’ families and costs from any potential lawsuits.

In the U.S., airlines have removed the Boeing 737 MAX from their schedules through December at the earliest, detailing daily flight cancellations in the hundreds ahead of the busy Christmas and New Year’s holiday travel season.

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

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