 An American Airlines Boeing 737 Max jet plane is parked at a maintenance facility in Tulsa, Okla. (Photo: Reuters) |
The settlement, which allows Boeing to avoid prosecution, includes a fine of 243.6 million USD, compensation to airlines of 1.77 billion USD and a 500 million USD crash-victim fund over fraud conspiracy charges related to the plane’s flawed design.
Boeing said it would take a 743.6 million USD charge against its fourth-quarter 2020 earnings to reflect the deferred prosecution agreement, a form of corporate plea bargain. Boeing had put aside reserves of 1.77 billion USD in prior quarters to provide for compensation to airlines.
The Justice Department deal, announced after the market close on Thursday, caps a 21-month investigation into the design and development of the 737 MAX following the two crashes, in Indonesia and Ethiopia in 2018 and 2019, respectively.
The crashes “exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers,” acting Assistant Attorney General David Burns said in a statement accompanying the agreement.
“Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 MAX airplane and engaging in an effort to cover up their deception,” Burns said, referring to the Federal Aviation Administration.
The crashes triggered a hailstorm of investigations, frayed US leadership in global aviation and have cost Boeing some 20 billion USD.