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Boeing agrees $2.5 billion 737 Max settlement
Boeing has agreed a $2.5 billion settlement with the US Department of Justice (DoJ) over the circumstances that led up to two fatal crashes involving its 737 Max aircraft.
Some 346 people were killed in the crashes in October 2018 and March 2019, which resulted in the aircraft being grounded worldwide owing to a technical fault with the model.
Under the agreement, Boeing will pay a $243.6 million penalty and provide the families of those killed in the Lion Air and Ethiopian Airline tragedies an additional $500 million compensation.
It also requires Boeing compensate airline customers $1.77 billion for financial losses resulting from the aircraft’s grounding. The 737 Max is yet to return to commercial service nearly two years later.
The resolution will see the DoJ defer prosecution of the company, providing it abides by the terms of a three-year deferred prosecution agreement, after which time the charges against Boeing will be dismissed.
In a statement, Boeing said: "The agreement is based on the conduct of two former Boeing employees and their intentional failure to inform the Federal Aviation Administration (FAA) Aircraft Evaluation Group (AEG), the group within the FAA responsible for making pilot training determinations, about changes to the [aircraft’s] Maneuvering Characteristics Augmentation System (MCAS).
"As a result of this conduct, the agreement states the FAA AEG was not fully informed about MCAS’s expanded operating range when it made its training determinations for the Max.
"While focusing on the conduct of these two former employees, the agreement recognises other Boeing employees did inform other officials and organisations within the FAA about MCAS’s expanded operating range in connection with the certification of the 737 Max."
Boeing president and chief executive David Calhoun said: “I firmly believe entering into this resolution is the right thing for us to do – [it is] a step that appropriately acknowledges how we fell short of our values and expectations.
"This resolution is a serious reminder to all of us of how critical our obligation of transparency to regulators is, and the consequences that our company can face if any one of us falls short of those expectations."
James Chapple
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