Boeing will pay over $2.5B in Max jet settlement

Boeing will pay more than $2.5 billion in a settlement agreement with the Justice Department stemming from the 737 Max debacle, the government said Thursday. The agreement resolves a criminal charge that Boeing conspired to defraud the Federal Aviation Administration, which regulates the company and evaluates its planes.

The Max was grounded worldwide in March 2019 after 346 people were killed in crashes in Indonesia and Ethiopia. The two accidents damaged boeing’ s once- sterling reputation and hurt its relationships with airlines and aviation regulators around the world. The company eventually fired its CEO, and the scandal has cost it billions of dollars in fines, settlements and lost orders.

By settling now, with less than two weeks left in the Trump administration, the company takes off the table the question of how a Biden Justice Department would view a settlement. President Donald Trump had repeatedly discussed the importance of Boeing to the economy, even going so far last year as to say he favored a bailout for the company.

There was never a real threat that prosecutors would have sought a criminal conviction. Such a move could have potentially put Boeing, one of the largest U.S. manufacturers, out of business and cost tens of thousands of jobs at the plane-maker, its suppliers and other businesses.

As part of Thursday’s agreement, $500 million will be set aside to compensate the families of those who died. Boeing will also pay the government a penalty of nearly $244 million and pay $1.77 billion in compensation to its airline customers who were unable to use or take deliveries of the Max, which remains grounded in some parts of the world. Flights aboard the plane in the U.S. resumed last week, after the FAA lifted its ban on the plane in November.

The settlement will not affect a criminal investigation into whether at least two Boeing employees broke the law in connection with knowingly misleading the FAA while the company was seeking approval for the Max about changes made to software known as maneuvering characteristics augmentation system. Their actions led the FAA to leave information about the software out of a final report, which in turn resulted in its omission from airplane and pilot training materials, according to the Justice Department. The software was implicated in both crashes.