Boeing Agrees to Plea Deal: A Brief Summary of America’s Aviation Giant
Following a series of legal battles arising from two 737 Max crashes that resulted in the deaths of 364 people, Boeing has agreed to plead guilty to fraud against the U.S. government.
The Department of Justice (DoJ) announced the plea deal on July 7, along with a fine of $243.6 million (£190 million).
The origin of the case dates back to crashes in two nearly identical 737 Max aircraft in 2018 and 2019, leading to the global grounding of the model for over a year.
In 2021, the DoJ charged Boeing with one count of conspiracy to defraud regulators regarding its Manoeuvring Characteristics Augmentation System (MCAS) software, which was implicated in both crashes, alleging deception of the Federal Aviation Administration (FAA).
Boeing reached a $2.5 billion settlement, which includes $500 million for family members affected by the crashes. Additionally, Boeing was mandated to comply with safety monitoring for three years to avoid prosecution, which ended on January 7 of this year.
However, two days before the deadline, an Alaskan Airlines Boeing 737 Max 9 aircraft experienced an incident where a door plug panel blew out at 16,000 feet over Oregon, resulting in a refrigerator-sized hole in the aircraft. Despite landing safely, this incident left the company in violation of the safety agreement just two days before the deadline.
The DoJ determined on May 14 that Boeing had breached their 2021 agreement, which Boeing contested, and on July 7, the plea deal was announced.
In both crashes—Lion Air Flight 610 in 2018 and Ethiopian Airlines Flight 302 in 2019—issues with Boeing’s newly launched flight software MCAS caused mid-flight stalling in both planes.
The MCAS system in both planes automatically caused the nose to pitch down, rendering the pilots unable to disable the software, leading to both planes crashing and resulting in the loss of 346 passengers and crew members.
Boeing downplayed the importance of MCAS and omitted it from aircraft manuals, with most pilots being unaware of its existence.
Boeing decided to accept the plea deal to pay a fine or face trial on felony charges of defrauding the U.S. government and the FAA for concealing the MCAS system upon its initial release to federal regulators.
The DoJ has called for an additional $243.6 million fine, identical to the penalty Boeing paid in 2021 as part of the initial prosecution agreement.
As part of the agreement, Boeing is expected to invest $455 million in safety and compliance programs and undergo independent monitoring for safety and quality control.
The agreement, subject to approval by a federal judge, is anticipated to be filed in the Northern District of Texas by July 19.
The plea deal has left crash victims dissatisfied, labeling it a “sweetheart deal,” while lawyers are urging the judge to reject it, arguing that it does not adequately acknowledge Boeing’s responsibility for the 346 deaths.
“The deadly consequences of Boeing’s crime are being concealed,” stated Paul Cassell, a lawyer representing some of the families in the criminal case against Boeing, in various media outlets.
Boeing is a significant U.S. government contractor, with 37% of its revenue in 2023 coming from such contracts, primarily in defense work, including military sales to other nations.
It is important to note that the plea deal solely addresses wrongdoing by Boeing prior to the crashes in Indonesia and Ethiopia and does not grant immunity for other incidents, including the Alaska Airlines incident.
Jacob Burg contributed to this report.
