Boeing, Justice Department reach deal over MAX crashes case

WASHINGTON

Boeing 737 MAX aircraft are assembled at the Boeing Renton Factory in Renton, Washington, on June 25, 2024.

Boeing said on Monday it had reached a deal with the U.S. Department of Justice (DoJ) over two fatal 737 MAX crashes, which court papers show would see the aviation giant plead guilty to fraud.

The agreement comes after prosecutors concluded Boeing flouted an earlier settlement addressing the disasters, in which 346 people were killed in Ethiopia and Indonesia more than five years ago.

"We have reached an agreement in principle on terms of a resolution with the Justice Department, subject to the memorialization and approval of specific terms," Boeing told AFP in a statement.

Court papers filed in Texas on July 7 said the company had agreed to plead guilty to "conspiracy to defraud the United States" during the certification of MAX airplanes.

Boeing will be fined under the deal and must invest a minimum of $455 million in "compliance and safety programs", while compensation for families will be determined by the court.

Boeing's latest legal predicament was triggered by a DoJ determination in mid-May that the company ignored a 2021 deferred prosecution agreement (DPA) by not meeting requirements to improve its compliance and ethics program after the MAX crashes.

Families of MAX victims were "highly disappointed" by the deal reached between Boeing and the DoJ, an attorney at Clifford Law representing them said.

"Much more evidence has been presented over the last five years that demonstrates that the culture of Boeing putting profits over safety hasn't changed. This plea agreement only furthers that skewed corporate objective," senior partner Robert A. Clifford said in a statement.

The families will ask the court to reject the plea deal at an upcoming hearing, according to an opposition filed by their legal team.

The original DPA was announced in January 2021, over charges that Boeing knowingly defrauded the Federal Aviation Administration during the certification of the MAX.

The agreement required Boeing to pay $2.5 billion in fines and restitution in exchange for immunity from criminal prosecution.

A three-year probationary period was set to expire this year. But in January, Boeing was plunged back into crisis mode when a 737 MAX flown by Alaska Airlines was forced to make an emergency landing after a fuselage panel blew out mid-flight.

In a May 14 letter to the U.S. court, DoJ officials said that Boeing breached its obligations under the DPA by "failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations."