Gary C. Kelly, Chairman and Chief Executive Officer, said: “Our people have done an incredible job managing the downgrading of DE MAX, while providing maximum customer service and one of the best operational performance in our history. On behalf of the Southwest Board of Directors, we thank our employees for their outstanding commitment throughout the year and are pleased to share the proceeds of our recent agreement with Boeing. The company stressed that the agreement was only a partial tally and that it continued to “discuss with Boeing damages for damages to Max lands.” NEW YORK/WASHINGTON (Reuters) – Southwest Airlines Co said on Thursday it had reached a confidential compensation agreement with Boeing Co for part of an expected $830 million damage $US for operating profit in 2019 due to the grounding of its 737 MAX aircraft. Southwest Airlines announced Thursday that it has entered into a confidential compensation agreement with Boeing regarding part of the expected financial damage related to the grounding of the 737 Max. DALLAS aircraft, 12.12.2019 /PRNewswire/ — Southwest Airlines Co. (NYSE: LUV) recently entered into a confidential agreement with Boeing Company (Boeing) to compensate for some of the financial damage caused by the grounding of the airline`s Boeing 737 MAX aircraft. In light of this agreement, the Southwest Board of Directors approved a discretionary and incremental shareholding in employee profits, related to the likely reduction in operating income for 2019 due to MAX lands. The company currently estimates this incremental profit shareholding at approximately $US 125 million. “SWAPA believes that the Southwest/Boeing agreement only consolidates our right,” he wrote. “We look forward to obtaining the details of the Boeing/Southwest agreement as part of the litigation investigation.” The amount is small in the context of southwest`s market capitalization, which exceeds $28 billion. The aviation sector will hardly budge in this news. But the confidential agreement could displace Boeing`s actions, because each new data point looks, to some extent, like a step forward in reintroducing the 737 MAX into commercial service.

In the second quarter, Boeing took a tax burden of nearly $5 billion for the expected compensation of the airline`s customers with grounded aircraft. However, the total cost of compensation for customers may be higher, as most agreements have not yet been negotiated and grounding is still ongoing. In a transaction statement, the Southwest Airlines Pilots Association said the agreement “does not far compensate for the losses” suffered by its pilots and other employees. The union, which filed a lawsuit against Boeing, which claims more than $100 million in lost wages from the grounding, said it would pursue legal action. Southwest says it directs MAX compensation on its cash flow so it can offset aircraft purchases. Southwest is one of the most honored airlines in the world, known for a three-way bottom-up approach that contributes to the airline`s performance and productivity, the importance of its people and the communities they serve, and a broad commitment to efficiency and the planet.