Boeing will pay $2.5 billion US to settle a criminal charge of defrauding safety regulators in connection with the development of the 737 Max aircraft, which suffered two deadly crashes.
The U.S. Justice Department said Thursday that Boeing agreed to the settlement, which includes money for the crash victims’ families, airline customers and airlines, as well as a criminal fine.
Prosecutors said Boeing employees concealed important information about the plane from the U.S. Federal Aviation Administration, then covered up their actions.
“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,” said Erin Nealy Cox, the U.S. Attorney in Dallas.
“Boeing’s employees chose the path of profit over candour,” said David Burns, acting assistant attorney general for the Justice Department’s criminal division.
Boeing admitted to deceiving FAA
Boeing began working on the Max in 2011 as an answer to a new, more fuel-efficient model from European rival Airbus. Boeing admitted in court filings that two of its technical pilot experts deceived the FAA about a flight-control system called the Manoeuvering Characteristics Augmentation System, or MCAS, that could point a plane’s nose down if sensors indicated the plane might be in danger of an aerodynamic stall — that it might fall from the sky.
Boeing downplayed the significance of MCAS and didn’t mention it in airplane manuals. Most pilots didn’t know about it.
The first airlines began flying the 737 Max in mid-2017. On Oct. 29, 2018, a Max operated by Indonesia’s Lion Air plunged into the Java Sea. The Federal Aviation Administration let the Max keep flying. On March 10, 2019, another Max operated by Ethiopian Airlines crashed nearly straight down into a field just a few minutes after takeoff from Addis Ababa.
In both crashes, everybody on board was killed — 346 people in all.
On both flights, MCAS was activated by a faulty reading from a single sensor. The system repeatedly pushed the planes’ noses down, and pilots were unable to regain control.
After the planes were grounded worldwide, Boeing changed MCAS so that it always uses two sensors, along with other changes to make the automated system less powerful and easier for pilots to override. The FAA also ordered other changes, including the rerouting of some wiring to avoid potential dangerous short-circuiting.
In November, the FAA approved Boeing’s changes, and several carriers, including American Airlines, resumed using the planes.
Under the settlement announced Thursday, Boeing will pay a $243.6 million US fine, $1.77 billion US in compensation to airlines that were unable to use their Max jets while they were grounded, and $500 million US into a fund for the families of passengers who were killed in the crashes.