'Fraudulent and deceptive' Boeing to pay out US$2.5 billion over 737 MAX crashes

'Fraudulent and deceptive' Boeing to pay out US$2.5 billion over 737 MAX crashes.
Workers attend the crash site of Ethiopian Airlines ET302 using a Boeing 737 MAX 8, which killed all 157 passengers and crew on board. Photo credit: Getty

Boeing has agreed to pay out over US$2.5 billion (NZ$3.45 billion) to settle criminal charges in the US that it covered up information about its notorious 737 MAX aircraft model, which was involved in two major air disasters killing a total of 346 people.

However, the settlement means Boeing will not have to plead guilty to charges including conspiracy to defraud the US, despite admitting in court documents that it deceived the US Federal Aviation Administration (FAA) about a key safety system tied to both fatal crashes called MCAS.

The US Justice Department says US$500 million of the payout will go to heirs, relatives and legal beneficiaries of the passengers killed in the crashes.

As for the rest of the settlement, it includes a criminal monetary penalty of US$243.6 million and compensation payments to Boeing's 737 MAX airline customers of US$1.77 billion.

"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," Acting Assistant Attorney General David P Burns of the Justice Department's Criminal Division wrote in a release.

"Boeing's employees chose the path of profit over candour 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."

Boeing Chief Executive David Calhoun said in a statement the agreement "appropriately acknowledges how we fell short of our values and expectations."

All 737 MAX aircraft were grounded around the world following the fatal crashes in late 2018 and early 2019, but some airlines restarted using the aircraft in late 2020 after safety upgrades.

Boeing faces a three-year deferred prosecution agreement after which the charge will be dismissed, if the company complies with the agreement.

Reuters / Newshub.