Boeing has reached a settlement of more than US$2,5bn (R38bn) with the US Justice Department (DOJ) to settle a criminal charges case relating to the Boeing 737 MAX, according to several media reports.
The charges were that two Boeing employees defrauded the FAA’s Aircraft Evaluation Group (AEG) around certain safety issues connected to two fatal B737 MAX accidents.
The $2,5bn includes a criminal penalty charge of $243,6m (R3,7bn), plus $1,77bn (R27bn) in compensation to B737MAX operators. Additionally, it provides for the establishment of a $500m (R7,6bn) fund for crash victims’ beneficiaries – the families of the 346 victims of the ill-fated 2018 Lion Air flight 610 and the Ethiopian Airlines flight 302, five months later.
Aviation Week reports that the DOJ found that two Boeing 737 MAX flight technical pilots specifically deceived the FAA’s AEG about the Manoeuvring Characteristics Augmentation System (MCAS), a flight control system modification that later became central to the investigations. “Because of their deception, a key document published by the FAA AEG lacked information about MCAS and, in turn, airplane manuals and pilot-training materials for US-based airlines lacked information about MCAS,” the DOJ said on January 7.
“After the initial accident, the FAA AEG ‘learned for the first time about the change to MCAS, including the information about MCAS that Boeing concealed from the FAA AEG,’ the DOJ said. “Meanwhile, while investigations into the Lion Air crash continued, the two B737MAX flight technical pilots continued misleading others, including at Boeing and the FAA, about their prior knowledge of the change to MCAS.
On March 13, 2019, three days after the second accident involving Ethiopian Airlines Flight 302, the FAA joined other worldwide regulators in grounding the B737 MAX.
Of the $2,5bn settlement, Boeing says $1,77bn (R27bn) has already been included in amounts reserved in prior quarters for B737 MAX operator compensation and adds that it expects to incur earnings charges equal to the remaining $743,6m (R11,36bn) in the fourth quarter of 2020.
