US opens $670m fund for relatives of Boeing 737 Max victims

WASHINGTON • A US$500 million (S$670 million) fund to compensate relatives of 346 people killed in two fatal Boeing 737 Max crashes has been opened, the claim administrators told Reuters.

The fund, which opened on Monday, is part of a settlement with the US Justice Department (DOJ).

Boeing in January agreed to pay US$500 million to compensate the heirs, relatives and beneficiaries of the passengers who died on Lion Air Flight 610 and Ethiopian Airlines Flight 302 in 2018 and 2019.

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

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

The settlement allowed Boeing to avoid criminal prosecution but did not impact civil litigation by victims' relatives that continues.

In July 2019, Boeing named the two administrators to oversee the distribution of a separate US$50 million 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 faces numerous lawsuits in Chicago federal court by families of the Ethiopian crash asking why the Max continued flying after the first disaster.

The DOJ settlement includes a US$243.6 million fine and compensation to airlines of US$1.77 billion over fraud conspiracy charges related to the plane's flawed design.

The DOJ in January said Boeing's employees "chose the path of profit over candour by concealing material information" from the Federal Aviation Administration (FAA) concerning the operation of its 737 Max 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 planes 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 US$17 million FAA fine after it installed equipment on more than 700 Boeing 737 Max and NG aircraft that 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