Boeing to pay $2.5 Billion to Settle Charges in 737 MAX Crash probe

Summary

  • Boeing would pay $2.5 billion to resolve the criminal charge of defrauding safety officials in the 737 MAX crash probe.
  • The investigating agencies had alleged that material information was deliberately hidden from the Federal Aviation Administration.
  • Families of nearly 350 people who were killed in the two crashes would be compensated from the settlement amount.

US multinational aerospace company Boeing Co (LON: BOE) during a Justice Department investigation has admitted that its employees deceived aviation administration about safety matters linked to two fatal crashes of its 737 MAX jet in 2018 and 2019. Consequently, the leading aircraft manufacturer has agreed to pay US$2.5 billion to settle a criminal charge of defrauding safety regulators in the 737 MAX crash probe.

The US Probe was ongoing over the aerospace giant for more than two years since the crashes took place. Two employees of Boeing were investigated by the federal prosecutors for their role in the 737 MAX's design and equation with the Federal Aviation Administration (FAA). The investigating agencies had alleged that material information was deliberately hidden from the FAA.

Families of nearly 350 people who were killed in the two crashes would be compensated from the settlement amount paid by the leading plane maker. This should act as an example to emphasise the importance of absolute transparency to regulatory authorities.

These are tough times for the Seattle-based plane maker. The regulators grounded the 737 MAX jets across the globe following the crashes in Indonesia (2018) and Ethiopia (2019). The Boeing 737 has been the bestseller through the years, and the company has literally minted a lot of money by manufacturing these jets.

The MAX debacle has hit the company really hard with storage costs as planes remained grounded. Moreover, the onslaught of the pandemic in 2020 had exacerbated the situation by pushing the demand for new aircraft to all-time low. According to company’s estimates last year, the Boeing MAX debacle has cost the company nearly $20 billion.

According to some media reports, the cause of two lethal crashes was the faulty automated flight-control system, which was integrated with a sensor that gave faulty readings.

In November 2020, the FAA had given the nod for the Boeing 737 Max aircraft after a rigorous examination and redesigning of the 737 MAX automated flight-control system. In the last week of December 2020, the Boeing 737 Max returned to skies in the US as it flew from Miami to New York.

Also read: FAA clears Boeing 737 Max: How will it impact the British aviation stocks?

Boeing has now redesigned its automated flight-control system and has integrated two sensors in the refreshed model. Moreover, the refreshed model easily allows manual overrides in the new model, which were a clear miss in the previous model. This means that the pilots will now have more control. Even if technology fumbles, it must be fixed with human interference.

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