Ethiopian Airlines settles with Boeing following 737 MAX crash
SEATTLE – Two-and-a-half years after the deadly Ethiopian Airlines 737 MAX crash, with the final investigation report into the accident still pending, the airline’s management reached a settlement with Boeing and said it expects to resume flying the jet again by January.
In an interview with Bloomberg News on Thursday, Ethiopian CEO Tewolde GebreMariam said he was convinced “beyond reasonable doubt” that the MAX as upgraded by Boeing after the two fatal crashes is now safe.
“We are happy on the settlement,” Tewolde said. “I can confirm that we are committed to the Boeing 737 MAX. My estimate is by the end of the calendar year or beginning of next year, January, we will be flying the airplane.”
The Ethiopian government’s aviation authority has not yet lifted the grounding of the MAX imposed a day after Flight ET 302 crashed in March 2019 and took 157 lives. Yet, clearly, the government-owned airline fully expects the regulators to approve the jet’s return to service by the end of the year.
The financial terms of the settlement were not disclosed. The Seattle Times reported in January that Boeing had then offered an amount on the order of $500 million to $600 million, a large portion of which was not cash but concessions, including discounts on future airplane sales and waivers on maintenance costs.
A Chicago law firm advising the airline wrote a letter to Tewolde then urging him to reject a settlement and instead to sue the manufacturer for punitive damages in the U.S., hoping to win “not less than $1.8 billion in cash.” That advice wasn’t taken.
The settlement comes as Ethiopia is torn by a bloody civil war in the northern region of Tigray that has frayed relations with the U.S. and undermined its economy. Meanwhile, the state-owned airline has struggled for 18 months with the extreme downturn in air travel because of the COVID-19 pandemic.
Parallel to the settlement over the MAX, Ethiopian Airlines last week made public a related agreement: Boeing will partner with Ethiopian to make the airline’s base in Addis Ababa “Africa’s aviation hub” and to set up a manufacturing facility there to make airplane parts.