The Boeing Company (NYSE: BA) agreed to pay over £1.84 billion in penalties and compensation as part of its settlement with the United States Department of Justice over a plane crash in Indonesia and another in Ethiopia which took 346 lives combined. The two incidents only five months apart led to a ban on Boeing’s world-famous 737 MAX jetliner in March 2019.
Boeing shares slid more than 0.5% in extended trading on Thursday. Including the price action, the stock is now exchanging hands at £155.64 per share. In comparison, it had plummeted to as low as £69.95 per share in March when the COVID-19 restrictions brought the demand for air travel to a near halt.
The settlement enables Boeing to sidestep prosecution and demand £179.34 million to be paid in fines and £1.3 billion in compensation to airlines. The aeroplane manufacturer will also pay £368.11 million for a crash-victim beneficiaries fund to settle charges of fraud and conspiracy related to the flawed design of the 737 MAX.
Boeing to book a £547.46 million charge in Q4
Boeing also said on Thursday that the agreement will result in a £547.46 million charge that it will book against its Q4 earnings. In a report published in the last week of October, the Chicago-based company had reported a narrower net loss of £358.59 million in the fiscal third quarter.
The American multinational also confirmed the closure of its Seattle Research and Development centre on Thursday. Following a 21-month investigation, acting Assistant Attorney General David Burns commented on the settlement late on Thursday and said:
“The crashes exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial aeroplane manufacturers.
