Boeing Co will pay over $2.5bn to resolve the United States Department of Justice (DOJ) investigation into two deadly 737 MAX crashes that killed 346 people, the DOJ said, but will not be forced to plead guilty to criminal charges.
The DOJ said the settlement includes a criminal monetary penalty of $243.6m, compensation payments to Boeing’s 737 MAX airline customers of $1.77bn, and the establishment of a $500m crash-victim beneficiaries fund to compensate the heirs, relatives and legal beneficiaries of the passengers.
Two deadly crashes in Indonesia in 2018 and Ethiopia in 2019 killed 346 people in total. In both crashes, the 737 MAX system pushed the nose down repeatedly based on faulty sensor readings, and pilots were unable to regain control.
The MAX was grounded worldwide in March 2019, days after the second crash. Reports by committees from the US House of Representatives and the Senate faulted Boeing and the US Federal Aviation Administration (FAA) for failures in the process of certifying the plane.
Boeing was charged with one count of conspiracy to defraud the United States. The largest US airplane manufacturer faces a three-year deferred prosecution agreement after which the charge will be dismissed if the company complies with the agreement.
“The tragic crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers,” said Acting Assistant Attorney General David P. Burns.
“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.”
Boeing admitted in court documents that two of its 737 MAX Flight Technical Pilots deceived the FAA about a key safety system tied to both fatal crashes called MCAS.
Boeing Chief Executive David Calhoun said in a statement the agreement “appropriately acknowledges how we fell short of our values and expectations.”
The airline payment fund will include prior payments already made by the Boeing to airlines.
In November, the FAA approved changes that Boeing made to the automated flight-control system implicated in crashes, clearing the way for the 737 MAX to return to the skies.
Boeing’s 737 MAX then resumed passenger flights in the US in late December for the first time since the 20-month safety ban was lifted.