Boeing pays $2,5 billion fine for Boeing 737 Max fraud

TRAVEL NEWS – January 08, 2021: Boeing has agreed to pay $2,5 billion to serve the criminal charges in the USA around the problematic 737 Max.

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Information about safety withheld

Officials argued that the manufacturer had hidden information from safety inspectors about the aircraft's design. The US Department of Justice said the company chose "profit over honesty," hindering surveillance of the planes involved in two deadly crashes.

Families get 500 million dollars

About $500 million will go to the families of the 346 people killed in the tragedies in Indonesia and Ethiopia.

“The tragic crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 revealed fraudulent and deceptive conduct by employees of one of the world's leading commercial aircraft manufacturers,” said acting assistant attorney general David Burns.

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Boeing is responsible

Boeing employees chose the path of profit over candor by hiding material information from the FAA about the operation of its 737 Max aircraft and making an effort to cover up their deception.

“This resolution holds Boeing accountable for the criminal misconduct of its employees, addresses the financial impact on customers of Boeing's airlines, and hopefully provides some measure of compensation to the families and beneficiaries of the victims of the crash.”

Boeing said the agreement acknowledged that the company was "deficient".

David Calhoun, Boeing CEO, added: “I firmly believe that entering into this resolution is the right thing to do – a move that appropriately acknowledges that we have not lived up to our values and expectations.

“This resolution is a serious reminder to all of us how critical our transparency obligation to regulators is and the consequences our business could have if one of us fails to meet those expectations.”

Automated Flight Control System: MCAS

The Justice Department said Boeing officials had hidden information about changes to an automated flight control system known as MCAS, which investigations have linked to the crashes in Indonesia en Ethiopia in 2018 and 2019.

The decision meant that pilots' manuals had no information about the system, which exceeded pilots' commands based on erroneous data. This, in turn, forced the two aircraft into a nosedive shortly after takeoff.

Boeing did not cooperate with investigators for six months, the Justice Department said.

Under the terms of the agreement, Boeing was charged with one count of conspiracy to defraud the United States. The terms will expire after three years if the company continues to honor the deal.

1,77 billion to Boeing customers

The majority of the total settlement ($1,77 billion) will go to the airline's customers, who were affected by the grounding of the planes after the crashes.

The company also agreed to pay a $243 million fine.