Company News

EXCLUSIVE-Boeing in talks with Alaska Air for potential 737 MAX order after jet's return to service -sources

(New throughout, adds details on deal, Boeing and Alaska Air decline comment)

SEATTLE/CHICAGO, Oct 8 (Reuters) - Boeing Co is in discussions to sell 737 MAX jets to Alaska Air Group Inc once the plane returns to service following a lengthy grounding, three people familiar with the matter said.

The talks are part of a series of negotiations between Boeing and several airlines over jet orders or compensation after the 737 MAX was banned worldwide following two fatal crashes.

Boeing and Alaska Air declined to comment.

Any deal would be subject to U.S. Federal Aviation Administration approval of proposed 737 MAX safety upgrades.

Alaska Air already had ordered 37 of the jets before the grounding. If confirmed, a new order from such a major carrier would give Boeing’s 737 MAX a sorely needed commercial boost as the U.S. planemaker tries to move beyond a crisis that has hammered its finances.

It would also mark a post-crisis test of the balance of power between Boeing and Airbus. The European planemaker is battling to keep a foothold in Alaska Air. That carrier once exclusively used Boeing jets, until it acquired Airbus operator Virgin America.

However, any new deal between Alaska Air and Boeing is expected to include significant discounts given the MAX’s woes and plunging demand for airplanes during the coronavirus crisis, industry sources said.

The talks are among several discussions Boeing is having with airlines, hoping to stimulate demand for the jet when it returns to the air. Analysts caution cutting prices too far could rattle some existing customers. (Reporting by Eric M. Johnson in Seattle and Tracy Rucinski in Chicago Editing by Chris Reese and David Gregorio)