Southwest Airlines reported a sharp drop in profit in the fourth quarter because of the continued grounding of the Boeing 737 Max. It said it will seek additional compensation from Boeing as the problem is expected to stretch deep into 2020.
The 737 Max was grounded in March following two fatal crashes that killed 346 people, and Boeing announced this week that it doesn't expect approval for the plane to fly again until the middle of 2020. Southwest owns 34 of the Max jets, more than any other airline, and it had expected to end the year with 75 of the jets by the end of the year before the grounding halted deliveries of new planes. Boeing and Southwest reached a confidential agreement on compensation late in the year.
Southwest increased profit-sharing payments to employees by $97 million with money it got from Boeing.Read MoreSouthwest reported its net income fell $140 million in the fourth quarter and $167 million in the year, mostly because of the loss of the Max jets. The airline has been removing about 330 weekday flights from its schedule due to the grounding.
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