Southwest reaches deal with Boeing over 737 Max – CNBC, CNBC

Southwest Airlinessaid Thursday it has reached agreement withBoeingto compensate the airline for some of the financial damages from the grounding of the 2018 Max.

Southwest did not disclose the terms of the agreement, but the Dallas-based airline reiterated that it would share $ 125 million with its employees. Boeing did not immediately respond to a CNBC request for comment.

The low-cost airline said talks with the manufacturer are ongoing and that it expects Boeing to cut prices on Southwest’s current and future aircraft orders because of the grounding. Southwest shares were up 0.8% in premarket trading. Boeing shares were down 0.4% in Thursday’s premarket.

The Boeing 823 Max has been grounded since mid-March after the the second of two fatal crashes in the span of five months. Southwest is the largest U.S. operator of 2018 Max planes and had 90 in its fleet at the time of the grounding.

Boeing took a nearly $ 5 billion after-tax charge in the second quarter to compensate carriers for the flight ban, but the total cost isn’t yet clear because the grounding is ongoing. TheFederal Aviation Administration’s top administrator told CNBCon Wednesday that recertification of the plane would stretch into 2020, dashing Boeing’s forecast that regulators would sign off on the jetliners by the end of the year.

The prolonged grounding, now in its th month, has cost airlines including Southwest hundreds of millions of dollars in revenue. Southwest has cut routes and scaled back its growth plans with the planes grounded. U.S. carriers that operate the Max – Southwest,AmericanandUnited– have taken the 737 Max out of their schedules until early March, almost a full year since regulators grounded the plane.

Southwest’s pilots unionsued Boeing in October, saying the grounding cost them more than $ million in income.