October 30, 2019 / 7:08 PM / 15 days ago

Southwest had $1mln per 737 MAX rebate clause on training

Oct 30 (Reuters) - Boeing Chief Executive Dennis Muilenburg said on Wednesday Southwest Airlines Inc had a $1 million per plane rebate clause in a contact with Boeing Co if its 737 MAX planes required new simulator training.

Representative Peter DeFazio, who chairs the House Transportation and Infrastructure Committee, said the rebate would have covered 280 planes ordered by Southwest.

Muilenburg said he “believed that was part of the contract structure we had with Southwest.” He added “it’s not uncommon for us to have incentive clauses in these contracts.” If the FAA required the simulator training it “would have cost Boeing hundreds of millions of dollars and given its competitor an advantage,” DeFazio said. (Reporting by David Shepardson; Editing by Sandra Maler)

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