Boeing says it’s entered into a $2.51 billion agreement with the U.S. Justice Department to resolve a criminal charge related to the Federal Aviation Administration’s evaluation of Boeing’s 737 MAX airplanes.
The deferred-prosecution agreement addresses a single charge of conspiracy to defraud FAA inspectors about the safety of the 737 MAX’s automated flight control system. Investigators say changes to a component known as the Maneuvering Characteristics Augmentation System, or MCAS, were to blame in a pair of catastrophically fatal 737 MAX crashes that occurred in Indonesia in October 2018 and in Ethiopia in March 2019.
Those crashes led the FAA and other regulators to ground hundreds of 737 MAX planes operated by airlines around the world. After more than a year of investigations, software fixes and revisions to pilot training requirements, the FAA cleared the planes to return to service last November.
The agreement calls for Boeing to pay a penalty of $243.6 million, provide $1.77 billion in compensation to the airlines that purchased 737 MAX jets, and establish a $500 million fund to compensate the families of the 346 people who were killed in the two crashes. Boeing also agreed to cooperate with investigators and strengthen its anti-fraud compliance program.
If Boeing complies with the requirements of the agreement, filed today with a federal court in Texas, the criminal charge will be dismissed after three years.