Alaska Air was paid $160 million in cash by Boeing for the 737 Max 9 issues

By Tomi Kilgore

Air carrier widened its first-quarter loss estimate due to a change in how the compensation from Boeing was recorded

Alaska Air Group Inc. said it lost more in the first quarter than it previously estimated, but only because it changed how it recorded cash received from Boeing Co. as compensation for losses suffered from the groundings of 737 Max 9 jets.

The air carrier's stock (ALK) rose 1.7% in morning trading, while Boeing shares (BA) tacked on 1%.

The air carrier estimates that a door-panel blowout in January and the subsequent plane groundings cost the company $160 million, primarily in lost revenue and other costs due to irregular operations.

As a result, Alaska Air said it was paid $160 million in cash by Boeing during the first quarter. The company expects to receive additional compensation in future quarters, the terms of which are confidential.

Alaska Air said the cash compensation was initially booked as earnings. But after further review of accounting standards and industry precedence, the compensation is now being accounted as a reduction to aircraft assets.

Therefore, the company now expects an adjusted per-share loss of $1.15 to $1.05 for the first quarter, compared with a previous loss estimate of 55 cents to 45 cents and the FactSet loss consensus of 86 cents.

Alaska Air's stock has gained 9% year to date, while Boeing shares have tumbled 28.4% and the S&P 500 has advanced 10.1%.

-Tomi Kilgore

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04-04-24 0947ET

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