Another blow to Boeing: Feds say it hasn’t lived up to its deal in the wake of two deadly crashes

The Department of Justice announced Tuesday that Boeing has violated a settlement related to the deadly 737 Max 8 crashes in 2018 and 2019.

The decision opens the door for potential prosecution and is the latest blow for the company, which faces its most existential crisis in its 108-year history.

The announcement stems from two fatal crashes. In October 2018, a Lion Air 737 Max crashed into the Java Sea shortly after leaving Jakarta, Indonesia. The crash was caused by a flight control system called MCAS that was unknown to pilots.

"Behind the scenes, Boeing, regulators, and airlines are trying to figure out what happened. They announce publicly that there's this system. Here's how to deal with an emergency," said Andrew Tangel, who covers aviation for the Wall Street Journal, "the planes keep flying."

Another Boeing 737 Max crashed in Ethiopia under similar circumstances in March 2019. After that, the plane was grounded for nearly two years. Close to 350 people died in the two crashes.

At the time, the company was charged with one count of conspiracy to defraud the U.S. government. Boeing struck a deal in 2021 to defer prosecution on that charge, if the company could prove it was on good behavior and improving.

The Department of Justice is now alleging that Boeing failed to live up to the provisions of that deferred prosecution agreement, opening the door for potential prosecution, though there are other potential outcomes of this announcement.

"The deferred prosecution agreement allows for the DOJ to extend the probationary period," Tangel said. "It could just dismiss the charge after whatever term the company and DOJ workout or the court approves. So, Boeing still could escape a criminal conviction."

Listen to Soundside’s full conversation with Andrew Tangel by clicking the play icon at the top of this story.