United Airlines Holdings Inc ( UAL ) will be compensated by Boeing Co ( BA ) for financial losses incurred in the first quarter due to the grounding of 737 MAX 9 aircraft, the carrier said in a recent filing.

United Airlines revealed in a filing that a confidential deal with Boeing ( BA ) will involve “credit memos” for future purchases to offset the financial impact of the grounding and delivery rescheduling. A credit memo is an official acknowledgment of owed money to a customer.

United plans to account for these arrangements as a reduction to the cost basis of the previously-delivered Boeing 737 MAX 9 aircraft and future deliveries of the MAX 9 and MAX 10 aircraft.

United Airlines’s first quarter earnings reflected the approximately $200 million impact from the Boeing 737 MAX 9 grounding, without which the company would have reported a quarterly profit.

By February 5, 78 of United Airlines’ 79 737 MAX 9 aircraft had returned to service after receiving final approval from the Federal Aviation Administration, reported Reuters.

The mid-air panel blowout has significantly damaged Boeing’s reputation, leading to management changes and regulatory restrictions on production, with deliveries halving in March.

Also Read: Alaska Air Gets $162M In Initial Compensation From Boeing For January Incident, Issues Robust Q2 Outlook

Price Action: UAL shares are trading higher by 5.21% at $51.20 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.