US opens $500m fund for families of Boeing disasters

Washington —A $500m US fund to compensate the relatives of 346 people killed in two Boeing 737 MAX crashes has opened, the claim administrators said on Tuesday.

The fund, which opened on Monday, is part of a settlement with the US Justice Department. Boeing in January agreed to pay $500m to compensate the heirs, relatives and beneficiaries of the passengers who died in Lion Air Flight 610 and Ethiopian Airlines Flight 302 in 2018 and 2019.

Each eligible family will receive almost $1.45m and money will be paid on a rolling basis as claims are submitted and completed, administrators Ken Feinberg and Camille Biros said in a joint statement. Families have until Oct. 15 to complete claim forms.

The Justice Department and Boeing declined to comment.

The fund is part of a $2.5bn Justice Department settlement reached in January with Boeing after prosecutors charged the company with fraud over the certification of the 737 MAX after a Lion Air crash on Oct. 29, 2018 and an Ethiopian Airlines disaster on March 10, 2019.

The settlement allowed Boeing to avoid criminal prosecution but did not affect continuing civil litigation by victims’ relatives.

In July 2019, Boeing named Feinberg and Biros to oversee the distribution of a separate $50m to the families of those killed in the crashes and the new fund’s distribution follows a similar formula.

While Boeing has mostly settled Lion Air lawsuits, it still face numerous lawsuits in Chicago federal court by families of the Ethiopian crash asking why the MAX was allowed to continue flying after the first disaster.

The DOJ settlement includes a fine of $243.6m and compensation to airlines of $1.77bn over fraud conspiracy charges related to the plane’s flawed design.

The Justice Department said in January, “Boeing’s employees chose the path of profit over candour by concealing material information from the FAA concerning the operation of its 737 MAX jet and engaging in an effort to cover up their deception.”

Some lawmakers say the government did not go far enough, while Boeing says it has taken numerous steps to overhaul its safety culture.

Congress ordered a major overhaul of how the FAA certifies new jets in December and directed an independent review of Boeing’s safety culture.

The 737 MAX was grounded for 20 months after the two fatal crashes. The FAA lifted the order after Boeing made software upgrades and training changes.

Last month, Boeing agreed to pay a $17m FAA fine after it installed equipment on more than 700 Boeing 737 MAX and NG aircraft which contained sensors that were not approved.

“The FAA will hold Boeing and the aviation industry accountable to keep our skies safe,” FAA Administrator Steve Dickson said.

Reuters