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Boeing Airplane

Boeing Set To Pay $2.5 Billion In Settlements Over 737 Max Fraud

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Boeing will pay more than $2.5 billion to settle criminal charges that the company repeatedly lied about the 737 Max’s engineering problems which eventually led to two catastrophic crashes that killed hundreds of individuals; both crashes had no survivors. 

The company admitted to one count of conspiracy to defraud the United States, and beyond the settlements the company will face no further charges from the US Department of Justice. Acting Assistant Attorney General David Burns of the Justice Department’s Criminal Division recently released a statement regarding the charges. 

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“Boeing’s employees chose a 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 the deception.” 

Boeing is the nation’s second-largest defense contractor, and is now set to pay the Department of Justice a criminal penalty of $246.6 million. “The families and legal beneficiaries of the 346 passenger victims who died in the Lion Air Flight 610 in Indonesia in October 2018 and the Ethiopian Airlines Flight 302 in Ethiopia five months later will be paid from a fund of $500 million,” according to Burns. 

If split evenly that would equate to around $1.4 million for each family. A majority of the settlement will be given to airline companies that had purchased the faulty 737 Max aircraft and were forced to ground all of the planes following the two crashes. According to the Department of Justice all of the airlines impacted will receive $1.77 billion in compensations for their financial losses. 

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“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.” 

Both crashes were caused by changes in the airplane’s Maneuvering Characteristics Augmentation System which forced the nose of 737 Max to tilt towards the ground, leaving the pilots completely powerless in preventing a fatal crash landing. 

Boeing President and Chief Executive Officer, David Calhoun, recently sent out a note to his employees throughout the nation, explaining that he “firmly believes that entering into this resolution is the right thing to do for Boeing, and is a step that appropriately acknowledges how the company fell short of its values and expectations.” 

“This resolution is a serious reminder to all of us of how critical our obligation of transparency to regulators is, and the consequences that our company can face if any one of us falls short of those expectations,” Calhoun continued. Internal Boeing documents revealed that engineers of the 737 Max aircraft notified the company of the Augmentation System’s “egregious problems” as early as 2016, so many are upset with the settlement announcement, claiming the company should be much more severely punished for such a careless mistake that claimed so many innocent lives.

Boeing 737 Max Returns To US Skies With First Commercial Flights After Crashes

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American Airlines announced last week that they were set to operate the first US commercial flight of Boeing’s 737 Max aircraft’s since the two deadly crashes that occurred in 2019, prompting a worldwide grounding of all Boeing 737 Max’s in March of the same year. 

The flight at this point has already departed, and was scheduled as American Airlines Flight 718, which departed from Miami International Airport at 10:30 a.m. ET for New York’s LaGuardia Airport. Fort Worth is the Texas-based carrier of the aircraft’s that will be operating daily round-trip flights between Miami and New York, and then will begin increasing services to other cities in the coming weeks of the new year. 

United Airlines plans to begin flights using the 737 Max’s on February 11th out of its Denver and Houston hubs. Southwest Airlines agreed to begin flying the planes in the second quarter of 2021. Gol is a Brazilian carrier of strictly Boeing 737 Max planes that actually performed the first relaunch of the jets earlier this month. 

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The planes in general are much more fuel-efficient when compared to traditional commercial planes, which makes them central to a lot of airlines plans around the world. More than 3,000 of the jets are currently on order internationally. 

When all Boeing 737 Max jets were forced to ground in March of 2019, it was quickly recognized as the largest grounding in US history. The Federal Aviation Administration just recently cleared the 737 Max for commercial flight again after Boeing made several safety-related changes to the aircraft. 

Lion Air flight 610 in Indonesia in October 2018 and Ethiopian Airlines Flight 302 in Ethiopia in March 2019 were the two flights that resulted in deadly crashes. Pilots on both flights claimed to have battled an automated flight-control system that was incorrectly activated somehow. All 346 individuals on both flights were killed.

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Changes made to the jets include “making the flight-control system less aggressive, providing more redundancy and implementing more robust pilot training that includes time in a flight simulator,” according to news reports. Investigations into both crashes found that there were a multitude of problems with each plane’s development, design, and certification by US regulators.

American Airlines and other carriers of the jets have said that if customers booked a flight on the 737 Max without knowing and didn’t feel comfortable flying on that model, they could switch their flight for free. FAA Administrator Steve Dickson spoke with the media last month, claiming he is “100% confident in the jets and a repeat of the scenarios that led to the two crashes is impossible.”

“In a way, the best thing for the 737 Max has been that it is has taken them 20 months to get the planes ready to going back into service and for almost a year we have had news of the coronavirus that has consumed more attention related to travel than the 737 Max,” said Henry Harteveldt, a former airline executive and president of Atmosphere Research Group, a travel consulting firm.

American Airlines has ordered 76 of the planes and originally had 24 in its fleet when the original grounding occurred in 2019, proving their confidence in the jets as well.