Turkish Airlines reaches compensation deal over Boeing 737 Max

It's reportedly worth $225 million

ISTANBUL, Dec 31 (Reuters) - Turkish Airlines has agreed on a compensation deal with planemaker Boeing Co over the grounding of the Boeing 737 MAX following two fatal crashes, the carrier said on Tuesday.

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It did not specify the size of the payment but Turkey's Hurriyet newspaper reported that it was worth $225 million including $150 million in compensation and $75 million covering things such as spare parts and training.

The 737 MAX has been grounded since March after a Lion Air crash in Indonesia and an Ethiopian Airlines crash killed 346 people within five months, costing the plane manufacturer more than $9 billion so far.

Turkish Airlines had taken delivery of 12 737 MAX planes before the grounding out of 75 it has ordered. It was supposed to have received 12 more since.

In December, a media report had said Turkish Airlines was preparing to open a court case against Boeing in relation to its losses.

FILE - In this March 27, 2019, file photo taken with a fish-eye lens, a Boeing 737 MAX 8 airplane sits on the assembly line during a brief media tour in Boeing's 737 assembly facility in Renton, Wash. (AP Photo/Ted S. Warren, File)

ANOTHER BOEING EXECUTIVE DEPARTS AS COMPANY TRIES TO CORRECT COURSE

Turkish is one of a number of airlines that have been seeking compensation from Boeing for the financial impact of the grounding.

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Southwest Airlines Co, the world's largest 737 MAX operator, said earlier in December that it had reached a confidential agreement with Boeing for a portion of a projected $830 million hit to operating income in 2019.

European charter airline TUI said on Tuesday that it was still in talks with Boeing.

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"We're at the negotiating table,'' said spokesman Martin Riecken, adding that TUI hoped to reach a settlement with Boeing but was still considering legal action. TUI was operating 15 of the planes before they were grounded and has another eight on order.

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TUI said the grounding cost it 293 million euros in its last financial year and the bill could be as high as 400 million euros in the current year depending on when the 737 MAX returns to service.

Last week, Boeing fired CEO Dennis Muilenburg after the company repeatedly failed to contain fallout from the grounding of the 737 MAX, its best-selling jetliner.

Boeing has acknowledged it will not be able to reach its 2019 targets and has announced it would halt 737 MAX production in January.

(Reporting by Ceyda Caglayan in Istanbul and Douglas Busvine in Berlin; writing by Daren Butler and Keith Weir; editing by Gerry Doyle and Jason Neely)