The 737 Max grounding will cost Alaska Airlines $150 million

The grounding of the 737 Max 9 after a January 5 incident that blew a hole in the side of an Alaska Airlines plane earlier this month will cost the airline about $150 million, Alaska announced Thursday.

The grounding of the 737 Max 9 after a January 5 incident that blew a hole in the side of an Alaska Airlines plane earlier this month will cost the airline about $150 million, Alaska announced Thursday. The loss is significant to an airline the size of Alaska, which reported on Thursday an adjusted income of $38 million in the final three months of the year and $583 million for the full year. The fourth quarter income was better than forecast for Alaska. The door plug blew off an Alaska Airlines flight on January 5, leaving a gaping hole in the side of the plane. While no passengers were killed, the incident led the Federal Aviation Administration to order a grounding of all 737 Max 9 jets. With 65 of the planes Alaska has the second most 737 Max 9 jets in its fleet, behind only United, which has also warned it expects a first quarter loss at least partly due to the cost of the grounding. On Wednesday, the FAA spelled out inspection procedures to return the planes to flight. Alaska Air said the first of its grounded jets will be back in service on Friday with more planes added every day as reviews are completed and each aircraft is deemed airworthy. “We expect inspections on all our 737-9 Max to be completed over the next week,” it said. The cost to Alaska Air is primarily from lost revenue, as the cost to compensate customers for hotels when their flights are canceled and overtime for staff will be balanced by the fuel savings achieved by flying 3,000 fewer flights.