Southwest Airlines / Boeing 737 MAX-8, St. Louis, Mo., May 30, 2018.

Boeing Accepts Federal Plea Agreement

July 9, 2024
The jet builder will plead guilty to criminal fraud and pay a severe fine, while avoiding a trial and further disruption to its manufacturing operations as it works to restore its reputation for reliability.

Boeing Co. accepted a U.S. Dept. of Justice deal and will plead guilty to criminal fraud in violating a 2021 agreement that protected the company from prosecution over two 737 MAX jet crashes, in 2018 and 2019. Those incidents killed 346 people, and although Boeing agreed to settlements with the victims it avoided federal prosecution for concealing the 737 MAX’s flaws from regulators.

Along with the guilty plea, Boeing will pay a fine of $243.6 million for failing to correct the 737 MAX program’s ongoing liabilities.

“We can confirm that we have reached an agreement in principle on terms of a resolution with the Justice Department, subject to the memorialization and approval of specific terms,” according to a Boeing statement.

It’s believed that Boeing accepted the plea deal rather than face more severe prosecution for fraud and the necessity to defend itself at trial, and the further disruption that would cause to its effort to restore the 737 MAX program and regain profitability.

The 2021 DoJ agreement had been set to expire earlier this year when a new 737 MAX incident caused an Alaska Airlines flight to land safely after a sidedoor plug blew open during a flight.

Since that time, 737 MAX assembly operations have been curtailed and under federal oversight, impacting Boeing’s revenues.

The original deal allowed Boeing to avoid prosecution for fraud on information that the DOJ claims to have but has never produced as evidence. That information presumably was gathered during investigations of the 737 MAX flight control system that failed and led to the two crashes.