Families of Boeing crash victims demand $25 billion penalty for what they call the ‘most fatal corporate offense in American history’

Boeing should be fined almost $25bn (£19.7bn) and face criminal proceedings over two fatal 737 MAX 8 crashes, according to relatives of some of the 346 victims who argue the company is guilty of the “deadliest corporate crime in US history”.

The plea was revealed in a letter to the US Department of Justice (DoJ), a month after it filed a case accusing the planemaker of breaching its obligations in a 2021 agreement that shielded Boeing from criminal prosecution.

Then, Boeing agreed to pay $2.5bn to resolve the investigation into its conduct, compensate victims’ relatives and overhaul its compliance practices following the crashes of 2018 and 2019.

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The terms of that deal – known as a deferred prosecution agreement – were due to expire in January this year but, two days beforehand, a Boeing 737 MAX 9 aircraft operated by Alaska Airlines suffered a mid-air panel blowout.

The incident has been the subject of multi-agency investigations, including by the DoJ.

Boeing denied last week that it had violated the terms of the deferred prosecution agreement through its production practices ahead of the MAX 9 Alaska Airlines accident.

The MAX 8 fleet was withdrawn from service for 20 months in the wake of the Ethiopian Airlines Flight 302 disaster outside Addis Ababa in March 2019.

All 157 on board were killed.

Six months earlier, a Lion Air 737 MAX 8, carrying 189 passengers and crew, crashed in Indonesia.

Poorly designed flight control software was ultimately blamed for both accidents.

Families of the dead are among the parties the DoJ is talking to before making a formal decision on the case by 7 July.

The relatives want the court in Texas to throw out the deferred prosecution agreement.

Paul Cassel, a lawyer representing 15 families, wrote in a letter to the DoJ: “Because Boeing’s crime is the deadliest corporate crime in US history, a maximum fine of more than $24bn is legally justified and clearly appropriate.

He added that part of the financial penalty could be suspended on condition Boeing makes multiple commitments regarding safety and scrutiny.

The court filing in May also exposes Boeing to a potential fresh criminal prosecution.

News of the fresh DoJ case, which could potentially seek further financial penalties and tougher oversight, poured further fuel on the corporate crisis that has engulfed Boeing this year since the January blowout.

A broad management shake-up will see both the chief executive and chairman go.

Regulatory action against the company has seen production limits placed on its factories, harming not only Boeing’s earnings through the drive for quality but also its customers’ expansion plans.

Ryanair is among those to have complained about a hit to its schedules and bottom line from late deliveries.

Boeing’s share price has lost a third of its value in the year to date.

Chief executive Dave Calhoun, who is due to leave at the end of the year, defended the company’s safety record during a Senate hearing on Tuesday, repeatedly denying assertions that Boeing placed profits over safety.

He told relatives of those who had lost loved ones in the MAX crashes, some of whom were in the room, that he was sorry “for the grief that we caused”.

The hearing coincided with the release of a fresh report by a whistleblower that included allegations defective parts may be going into 737 variant aircraft.

Sam Mohawk, a quality assurance investigator at an assembly plant near Seattle, also claimed that Boeing hid evidence after the industry regulator, the Federal Aviation Administration, told the company it planned to inspect the plant in June 2023.

“Once Boeing received such a notice, it ordered the majority of the (nonconforming) parts that were being stored outside to be moved to another location,” Mr Mohawk said, according to the report.

“Approximately 80% of the parts were moved to avoid the watchful eyes of the FAA inspectors.”

The parts were said to include rudders and wing flaps.

Boeing has said it is continuing to review his allegations.