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October 8, 2019

Boeing sued by Southwest Airlines pilots over $100 million in lost pay due to the 737 MAX grounding

Pilots for Southwest Airlines have sued Boeing for $115 million in lost compensation they say was caused by the grounding of its 737 MAX plane.

Southwest Airlines Pilots Association, in a complaint filed Monday on behalf of the pilots, claims Boeing "deliberately" misled pilots about the safety of the aircraft, which caused two fatal crashes in less than six months killing 346 people. It also alleges the grounding of the 737 MAX — which has resulted in thousands of flight cancellations at many airlines including Southwest — has reduced the pilots' opportunities for work. This has already resulted in lost compensation to pilots of more than $100 million, the complaint states, and the grounding is still ongoing.

The union says $115 million in damages will cover the wages pilots are set to lose by the end of the year, as well as 401(k) contributions, sick leave accrual and profit sharing.

"It is critical that Boeing takes whatever time is necessary to safely return the MAX to service," Jonathan Weaks, president of the union, said in the statement. "Our pilots should not be expected to take a significant and ever-expanding financial loss as a result of Boeing's negligence."

Boeing has already taken a huge financial hit from its troubles with the 737 MAX. In the most recent quarter, Boeing reported its largest loss ever — a $3.7 billion adjusted loss — as a result of the grounding. The company has also said it will set up a fund to distribute $100 million to the families of people who died in the crashes.

"Boeing has the greatest respect for the men and women who fly for Southwest Airlines," a Boeing spokesperson said in a statement. "While we value our long relationship with [the pilots union], we believe this lawsuit is meritless and will vigorously defend against it. We will continue to work with Southwest Airlines and its pilots on efforts to safely return the MAX to service."

The complaint alleges Boeing decided to "rush" the 737 MAX to market for the sake of profits and in doing so, "abandoned sound design and engineering practices, withheld safety information from regulators and deliberately misled its customers, pilots and the public" about design changes from previous versions of the 737 aircraft.

The crashes forced Boeing to undergo a rocky recertification process for the plane, and pushed the Federal Aviation Administration to review its process for approving planes for flight. Boeing has expressed hope that the 737 MAX will be able to operate again before the end of this year, though the grounding forced Southwest to cancel about 180 daily flights through January 5.

Southwest was hit especially hard by the grounding because it is the largest operator of the 737 MAX, according to the union's release. It states that more than 30,000 Southwest flights have been eliminated as a result of the defective plan, contributing to an estimated 8% decline in the airline's passenger service by the end of 2019.

But the move could set the stage for lawsuits from other airlines' pilots, as the grounding was felt widely across the industry. In September, American Airlines said it would be forced to cancel 140 flights per day through December 3. American had previously decided to drop a route entirely as result of the grounding. United Airlines has canceled 90 daily flights due to the 737 MAX until December 19.

Boeing was also sued in June by an anonymous pilot who alleged the company "demonstrated reckless indifference and conscious disregard for the flying public" in its development of the 737 MAX.

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