Boeing May Lose US Government Contracts, Threatening the Company's Future

Boeing has made a deal with the US Justice Department and pleaded guilty to defrauding the regulator during the investigation of the crashes of two 737 MAX aircraft, Reuters reports , noting that future lawsuits from relatives of the victims and the risk of losing government contracts threaten the company's future.

By striking a deal with the Justice Department, Boeing could avoid a high-profile trial that would further draw public attention to the company's crashes. At the same time, a criminal guilty plea "potentially threatens its ability to win government contracts with the U.S. Defense Department and NASA," Reuters notes.

The Boeing 737 MAX crashes in question occurred in 2018 in Indonesia and 2019 in Ethiopia. In the first case, an Indonesian Lion Air plane crashed into the Java Sea, killing 189 people. In the second, an Ethiopian Airlines plane crashed, killing 157 people. In both cases, the pilots reportedly complained of problems with the aircraft controls. The families of the victims insisted that Boeing should be held accountable for the disasters.

As it turned out later, the Boeing 737 MAX crashes were caused by erroneous sensor readings, which led to the planes diving. Boeing was accused of deceiving the regulator and trying to hide information about the malfunction.

After pleading guilty, the corporation will have to pay a fine of $243.6 million and appoint a corporate monitor for three years. In addition, the aircraft manufacturer has committed to spending at least $455 million on developing safety and compliance programs.

In 2024, Boeing's reputation was under threat due to a large number of reports of technical problems with its aircraft.

In April, for example, a Southwest Airlines Boeing 737-800 lost an engine skin while taking off from Denver. The plane in question was bound for Houston, but made an emergency landing at the departure airport shortly after takeoff.

In January 2024, an Alaska Airlines Boeing 737 MAX 9 suffered a mid-flight emergency exit flap failure. Following the incident, Alaska Air grounded all 65 of its Boeing 737 MAX 9s. On January 8, the carrier said preliminary inspections had found bolts on several panels that needed to be tightened. A month later, 57 of the airline's planes were back in service, Reuters reported .

In early March, the US Federal Aviation Administration grounded the Boeing 737 MAX 9. Later that month, Boeing announced that its top executives were stepping down.

To get the main news faster, subscribe to our telegram and twitter .