Boeing to plead guilty to fraud charge in connection with crashes that claimed 346 lives, foregoing trial | Business News
Boeing is set to admit guilt in a criminal fraud conspiracy case in connection with two fatal 737 MAX crashes in the US.
An official from the US Department of Justice (DoJ) announced that Boeing will pay a fine of $243.6m (£190.1m) and commit to investing at least $455m (£355m) over three years to enhance its safety and compliance programs as part of the plea agreement.
This settlement, which Boeing has acknowledged but not commented on, is the second time the company has been offered a plea deal by the department regarding the 2018 and 2019 crashes attributed to faulty flight control software.
A total of 346 individuals lost their lives in the incidents involving a Lion Air MAX 8 flight in Indonesia and, six months later, Ethiopian Airlines Flight 302 outside Addis Ababa.
American investigators search through debris after Ethiopian Airlines Flight 302 came down. Pic: Reuters
Family members of the victims, who criticized US authorities for going easy on Boeing with a $2.5bn (£1.95bn) settlement in 2021, had requested last month a new fine of nearly $25bn (£19.7bn).
They also called for criminal charges to be brought.
The new agreement with the DoJ, characterized by a lawyer for the families as a “sweetheart deal,” will skip the need for a trial.
In May, officials filed a lawsuit accusing the company of violating the terms of the previous deferred prosecution agreement in 2021.
The terms of that agreement were supposed to expire in January this year, but two days before, a Boeing 737 MAX 9 aircraft operated by Alaska Airlines experienced a mid-air panel blowout.
This incident has been under investigation by several agencies, including the DoJ, since then.
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Boeing CEO: ‘We fly safe planes’
Boeing refuted any violations of the deferred prosecution agreement terms in its production practices prior to the MAX 9 Alaska Airlines incident.
Although the guilty plea to a conspiracy to defraud charge and the amounts to be paid under the current agreement will be a disappointment to the families, the terms still need court approval.
Some lawyers representing the victims’ families said they intend to urge Texas judge Reed O’Connor, who is overseeing the case, to reject the deal.
The conviction puts Boeing’s ability to secure lucrative government contracts at risk.
The agreement only covers Boeing’s actions before the deadly crashes and does not shield the company from any other potential inquiries or charges related to the January incident or other conduct.
Boeing is admitting guilt to making false statements to the Federal Aviation Administration about expanding a critical software feature on the MAX to function at slow speeds.
This new software saved Boeing money by requiring less extensive pilot training.
The company has consistently denied prioritizing profits over safety.
