Boeing to pay $243.6 million fine over 737 MAX crashes

Boeing has agreed to plead guilty to a criminal fraud conspiracy charge and pay a $243.6 million fine to resolve a U.S. Justice Department investigation into two fatal 737 MAX crashes, according to a court filing on Sunday.

If approved by a judge, this plea deal will label Boeing as a convicted felon in relation to the 2018 and 2019 crashes in Indonesia and Ethiopia, which resulted in 346 deaths.

As part of the agreement, Boeing will invest at least $455 million over the next three years to improve safety and compliance programs.

Additionally, Boeing's board will meet with the families of the crash victims, and an independent monitor will oversee compliance and file annual reports. Boeing will be on probation during the monitor's three-year term.

Victims' families plan to ask Judge Reed O'Connor to reject the deal, citing his previous statement that Boeing's crime might be the deadliest corporate crime in U.S. history. Lawyers for the victims have called the deal a "slap on the wrist."

The fraud involved false representations about software that reduced pilot training requirements. The Maneuvering Characteristics Augmentation System (MCAS) software was linked to the two crashes that led to the FAA grounding the MAX fleet for 20 months, costing Boeing $20 billion.

The plea deal avoids a potentially contentious trial and allows Boeing to focus on future plans, including a new CEO and the acquisition of Spirit AeroSystems.

However, the plea deal may affect Boeing's ability to secure contracts with entities like the U.S. Defense Department and NASA, though it could request waivers.

Boeing - aircraft deliveries 2023 | Statista

Boeing - aircraft deliveries 2023 | Statistawww.statista.com

Boeing delivered 528 commercial aircraft worldwide in 2023.

Boeing in the Middle East

This development may prompt Middle Eastern regulators and airlines to implement stricter oversight and demand stronger safety assurances from Boeing.

Airline operators were not exactly happy with Boeing even before the plea of guilt.

According to Reuters, the chairman of Emirates said last May that he was not happy with Boeing, which he said had promised him that it would fix issues, including the 777X program.

During that period, Flydubai’s chief executive, Ghaith Al Ghaith, also said he was concerned about the delays from Boeing’s end.

“However, we maintain a close working relationship with Boeing. They are making significant efforts to regain customer trust, and we are among their customers,” he told reporters at the Arabian Travel Market in Dubai.

In the meantime, the DOJ and Boeing aim to finalize the written plea agreement and file it in federal court in Texas by July 19.