BY THE EDITORIAL STAFF
In one of the largest corporate criminal settlements in United States history, the Justice Department last week slammed Boeing with more than $2.5 billion in fines and compensation, rightly criticizing the aviation giant for tragically choosing “profit over candor” in two plane crashes that killed 346 people.
The settlement addresses outrageous behavior, undertaken to cut costs, involving the company’s 737 MAX airliners. The aircraft recently was recertified for flying after being grounded for more than a year. The 737 MAX is manufactured in Seattle; none of the criminal allegations involve Boeing North Charleston operation.
The “misleading statements, half-truths and omissions” of two senior Boeing technical pilots cited in a criminal information by the Justice Department were designed to falsely reassure the Federal Aviation Administration that the 737 MAX was so similar to other models of the same aircraft that there was no need to order pilot training. The two technical pilots were the official points of contact between Boeing and the FAA on the 737 MAX.
Their actions, besides leading to the horrific loss of life, were also short-sighted financially.
The crashes occurred because the planes’ pilots were unfamiliar with the behavior of the new Maneuvering Characteristics Augmentation System navigation software installed in the 737 MAX. Those crashes already have cost Boeing an estimated $20 billion, aside from the Justice Department settlement. Costs undoubtedly will mount as civil suits filed against the airline move through the courts.
The two Boeing technical pilots still face the possibility of criminal charges, and more senior officials also could be in line for prosecution. In documents released last year by the House Committee on Transportation and Infrastructure, one of the pilots said he was pressured by more senior Boeing officials to avoid having the FAA require more comprehensive training on the 737 MAX — training that would have cost the company hundreds of millions of dollars.
Boeing built 387 of the aircraft and entered service with 59 airlines, all of which had to suspend flights with the aircraft after the crashes.
The Justice Department agreement with Boeing, which allows the company to avoid prosecution, requires Boeing to make $1.77 billion in restitution payments to those airlines. Boeing agreed to pay a fine of $243.6 million and must set aside another $500 million to compensate the families of victims of the two crashes, although attorneys for the plaintiffs say they will ask for much more.
The first crash happened in 2018 on a Lion Air flight in Jakarta, Indonesia. It took 189 lives. The second crash, in 2019, was of an Ethiopian Airlines flight with 157 aboard in Addis Ababa, Ethiopia.
After the first crash, Boeing reported that the new MACS navigation software caused the nose of the 737 MAX to drop unexpectedly, but the FAA waited until the second crash five months later before grounding the aircraft. The federal agency initially was misled by Boeing about the significance of the MCAS, but it has received merited criticism for its slow response once it had the critical information.
Last month, as part of the omnibus budget and pandemic relief bill, Congress agreed to welcome reforms meant to strengthen FAA oversight and penalize aircraft manufacturing employees who mislead it.
The 737 MAX story reveals deep fissures in the procedures meant to ensure the safety of passenger aircraft. These must be corrected. The FAA was lax, but Boeing erred badly and deserves its punishment.
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