Jan 7, 2021 - Economy

DOJ: Boeing agrees to pay $2.5 billion to settle criminal charges after 737 MAX crashes

A ground crew member prepares to help push American Airlines flight 718, a Boeing 737 Max, away from its gate at Miami International Airport on Dec. 29. Photo: Joe Raedle/Getty Images

Boeing has agreed to pay more than $2.5 billion to settle criminal charges related to a conspiracy to defraud the Federal Aviation Administration in connection with the agency's investigation into the Boeing 737 MAX, the Justice Department announced Thursday.

Why it matters: Two Boeing 737 MAX crashes killed a total of 346 people in 2018 and 2019 and highlighted massive oversight and safety lapses on the part of the airline manufacturer.

Our thought bubble via Axios' Joann Muller: Boeing, which recently won permission to resume flights of the 737 MAX, is eager to put this shameful episode behind it and managed to escape an appointment of a government monitor. But the criminal settlement suggests the company continues to cooperate with ongoing and future investigations.

What they're saying: “The misleading statements, half-truths, and omissions communicated by Boeing employees to the FAA impeded the government’s ability to ensure the safety of the flying public,” U.S. Attorney Erin Nealy Cox for the Northern District of Texas said in a statement.

Details: Per the Justice Department, Boeing admitted in court documents that it deceived the FAA about a change in the aircraft's software that affected the flight control system of the Boeing 737 MAX. The criminal charges will be dismissed after 3 years if Boeing complies, per a Securities and Exchange Commission filing.

  • Boeing's $2.5 billion fee includes a criminal monetary penalty of $243.6 million, plus $1.77 billion in compensation payments to Boeing’s 737 MAX airline customers which the company says it has already set aside — and the creation of a $500 million crash-victim beneficiaries fund.
  • The company expects to incur earnings charges equal to the remaining $743.6 million in the fourth quarter of 2020.
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