Boeing 737 MAX Crash Results In $244M Penalty

Boeing 737 MAX Crash Results In $244M Penalty

Introduction

In January, the Department of Justice (DOJ) announced that the aircraft maker Boeing agreed to pay more than $2.5 billion to resolve a federal charge of “criminal misconduct” over the collisions in Indonesia and Ethiopia that killed 346 people.

The crash also resulted in the grounding of the company's 737 MAX jetliner model around the world, and the ban was lifted only after Boeing made safety upgrades and improvements in pilot training. The maker was also charged with a count of conspiracy to defraud the United States.

The acting Assistant Attorney General of the Justice Department’s Criminal Division said that 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.

The billion-dollar deal includes $243.6 million, which will be paid as a fine to the U.S. government for the criminal conduct and is considered to be a fine at the low end of the sentencing guidelines as per the court agreement.

The agreement additionally includes $500 million as compensation to the families of the 346 people who died in two crashes of the MAX and $1.77 billion or 70% of the $2.5 billion in compensation payments to Boeing’s MAX airline customers.

The settlement agreement also conditions that if the company meets a series of requirements, the charge of criminal fraud will be tossed after three years.