Brazil's Gol airline to receive $412 million from Boeing for grounding 737 MAX plane

Gol Linhas Aereas Inteligentes, Brazil’s largest airline company on Wednesday said that it will receive up to 2.4 billion reais ($412 million) from Boeing Co as compensation for grounding its 737 MAX plane following two fatal crashes. According to reports, the Brazilian company has already received 500 million reais in cash and will receive up to 1.9 billion reais in credits that it can use for the acquisitions of new aircraft. 

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The relief for Gol came at a time when the company was struggling like the rest of the airline industry across the world amid coronavirus pandemic. Gol was one of the biggest customers for Boeing's, as just last year it has ordered more than 100 flights of 737 MAX, which was later reduced due following the grounding of its plane. Gol has said that it will not make any new purchase payments to Boeing for the next two years. 

Read: Boeing, Victims' Lawyers Agree To Hold Conference Call Over Access To 737 MAX Documents

After the announcement, Gol saw a 73 percent jump in its share on the Sao Paulo stock exchange. The company like its peers from across the globe has not flown any plane in the month of April due to strict coronavirus restrictions and travel ban. Gol has said that it can sustain itself for the next 10 months if things continue at the same pace as they are right now. The company also said that it is in talks with different entities to raise finances of up to 1 billion reais. 

Read: Boeing Chief Says It Will Take 3-5 Years To Restore Company's Dividend After Pandemic Ends

Grounding of 737 MAX

Boeing 737 MAX flights were grounded after a Lion Airline plane carrying 189 passengers crashed into the sea moments after take-off in October 2018. Then in March 2019, an Ethiopian Airlines jet crashed shortly after take-off, killing all 157 people on board. Three days after the March crash, the United States' FAA temporarily grounded all Boeing 737 MAX 8 and 9 aircraft.

Read: Boeing To Suspend 787 Production In South Carolina Amid COVID-19 Pandemic

(Image Credit: AP)