Multinational travel and tourism company TUI and US manufacturer Boeing have signed a compensation deal in connection with the grounding of 737 MAX aircraft.

Compensation under this agreement includes a significant part of the costs sustained due to the grounding and credit for future aircraft orders. It will be provided over the next two years.

The two companies have not disclosed all the financial details of the agreement.

In addition to the compensation, they have also agreed to delay the delivery of 61 737 MAX.

As part of this delay, TUI will take less than half of the originally planned aircraft in the next two years.

The decision will reduce TUI’s capital and financing needs for aircraft over the next few years.

TUI also has plans to minimise the fleet of its five airlines in Germany, the UK, Belgium, the Netherlands and Sweden following the Covid-19 pandemic.

TUI CEO Fritz Joussen said: “We have reached a fair agreement. It strengthens our longstanding relationship with Boeing. With the agreement, TUI will be compensated for the majority of the costs incurred by the 737 MAX flight ban.

“With the new delivery planning, we will get fewer aircraft in the next few years. This gives us considerable flexibility and enables us to quickly adapt fleet growth to the currently challenging market environment. And it supports our plan to downsize the aircraft fleet and reduce the capital requirements for aircraft investments in the group.”

In March 2019, Boeing suspended 737 MAX operations after the US Federal Aviation Administration grounded the aircraft. It followed crashes involving two 737 MAX planes operated by Lion Air and Ethiopian Airlines.

Last month, Boeing restarted 737 MAX production at its Renton facility in Washington, US.