The aerospace company and popular airplane manufacturer Boeing has reached a settlement with the US Department of Justice (DOJ) to resolve a criminal charge brought against it in connection to the handling of its Boeing 737 Max airliner program which was found faulty and led to two fatal crashes that claimed 346 lives.

Boeing has agreed to pay fines totaling over $2.5 billion, split into a criminal monetary penalty of $243.6 million, $1.8 billion in compensation payments to Boeing’s 737 MAX airline customers, and $500 million to compensate relatives and beneficiaries of the 346 passengers who died in the two Boeing 737 MAX crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302.

After the two airplane crashes involving the Boeing 737 Max that occurred within a few months of each other, the Boeing 737 Max was grounded worldwide and spurred investigations from US authorities that determined Boeing had cut corners and given “misleading statements, half-truths, and omissions” concerning the evaluation of the Boeing 737 Max which was later found faulty.

Boeing itself has admitted that it deceived the US Federal Aviation Administration (FAA) about an important part of the flight control system of the Boeing 737 MAX and led the agency to omit a crucial section in its evaluation certification and also in manuals and pilot-training materials for U.S.-based airlines. 

With Boeing’s deception, pilots lacked a piece of crucial information regarding a system in the Boeing 737 Max, the Maneuvering Characteristics Augmentation System (MCAS) to be precise, and thus faced challenges operating them that resulted in fatal crashes in two cases.

With its settlement, charges of conspiracy to defraud the FAA that was brought against Boeing will now be dropped. As a result, Boeing has agreed, among other things, to co-operate with the US Justice Department on any ongoing or future investigations and prosecutions related to fraud.

For context, the $2.5 billion settlement represents roughly 3.3% of Boeing’s 2019 revenue of $76.6 billion.

Photo credit: Boeing

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