WASHINGTON/SEATTLE/CHICAGO, RAW – Boeing Co will pay over $US2.5 billion ($A3.2 billion) to resolve a US investigation into criminal conspiracy charges related to two fatal 737 MAX crashes, the Justice Department said, but the plane manufacturer will not be required to plead guilty.
The settlement includes a criminal fine of $243.6 million ($A312 million), compensation payments to Boeing’s 737 MAX airline customers of $US1.77 billion ($A2.27 billion), the Justice Department said. It also establishes a $US500 million ($A642 million) crash-victim beneficiaries fund to compensate heirs, relatives, and legal beneficiaries of passengers killed.
The 737 MAX crashes in Indonesia and Ethiopia killed 346 people within five months in 2018 and 2019. They triggered a hailstorm of investigations, frayed U.S. leadership in global aviation and have cost Boeing some $US20 billion ($A26 billion).
Plaintiffs lawyers representing families of victims of the Ethiopian Airlines crash said they were moving forward with civil litigation against Boeing in Chicago.
“The allegations in the deferred prosecution agreement are just the tip of the iceberg of Boeing’s wrongdoing,” they said in a joint statement.
Boeing is facing around 140 lawsuits by Ethiopian crash victim families and has already settled most of the lawsuits related to the Lion Air disaster in Indonesia.
Because of the crashes, the US Congress in December passed legislation reforming how the Federal Aviation Administration certifies new planes.
Acting Assistant Attorney General David P. Burns said the tragic crashes “exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers”.
“Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 Max airplane and engaging in an effort to cover up their deception,” he said.
Boeing said it expects to incur additional charges of $US743.6 million ($A955 million) in the fourth quarter as part of the settlement.
In March of 2019, the 737 MAX was grounded. The grounding was just lifted in November, 2020, after Boeing made significant safety upgrades and improvements in pilot training.
Boeing was charged with one count of conspiracy to defraud the United States. The largest US plane manufacturer faces a three-year deferred prosecution agreement, with the charge dismissed if it complies.
Boeing admitted in court documents that two of its 737 MAX flight technical pilots deceived the FAA about a safety system called MCAS, which was tied to both fatal crashes.
Boeing Chief Executive David Calhoun said in a statement the agreement “appropriately acknowledges how we fell short of our values and expectations”.