Southwest Airlines plans to share approximately $125 million in Boeing 737 MAX compensation with its employees, the low-cost carrier announced Thursday.
The airline-which is the largest operator of the troubled aircraft with a total of 34 in its fleet-recently reached a confidential agreement with Boeing to receive compensation for a portion of projected financial damages stemming from the grounding of the MAX since March.
The Southwest Board of Directors has authorized a discretionary, incremental profit-sharing accrual for employees tied to the projected reduction in operating income, the company 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 our history," Southwest CEO and Chairman of the Board, Gary Kelly said in a statement. "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."
Southwest added that the incremental profit-sharing award will be funded as part of the company's annual 2019 profit-sharing distribution in 2020 and plans to provide 2019 profit-sharing details, including the percentage each eligible Southwest employee will receive, early next year.
Southwest and Boeing are in ongoing discussions regarding compensation for damages related to the 737 MAX groundings. However, details and the settlement remain confidential, the airline said. If the $125 million is divided equally among Southwest's 59,000 employees, each should receive approximately $2,118.
Thursday's news comes just after FAA chairman Steve Dickson announced that the recertification process for the troubled 737 MAX aircraft will extend into 2020.
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