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World’s one of the largest airplane manufacturers, Boeing (BA.N)is set to face criminal chargesfor violating the 2021 agreement involving the 737 MAX jet's two fatal crashes in 2018 and 2019. US Justice Department (DOJ) plans to seek a guilty plea from Boeing. However, attorneys for the victim’s family member blasted the potential agreement as a “sweetheart deal”. The plea agreement offered by the DOJ contained a monetary fine of around $247 million and the appointment of an impartial monitor to oversee the business's safety and compliance procedures for three years . The current trouble faced by Boeing is the consequence of several incidents tied to the failed quality and miscreants over the past several years, some resulting in heart-wrecking events for the victim and their families.

The trailblazer in the airline industry, Boeing started its journey back in 1916 by the hand of William E. Boeing. The company has consistently innovated over the years, producing legendary airplanes such as the 707, 747, 777, and 787 Dreamliner. Due to the reliability and performance of its jets, the saying “If it’s not Boeing, I am not going” went on to gain immense popularity in the 20th century among airplane passengers. However, according to the critics, things started to loom due to its focus on cost over quality after the company’s 1997 merger with another American aircraft maker, McDonnell Douglas. When financial executives from McDonnell Douglas began taking on leadership positions at Boeing, the emphasis switched from engineering, quality, and safety to cost reduction, efficiency, and eventually profitability. Additionally, Boeing started to regard itself less as a maker of all the parts for aircraft and more as an aircraft designer and assembler. Boeing started spinning off its "non-core" operations groups, possibly because it made financial sense to stop some operations. For instance, Spirit Aero Systems, a major supplier to Boeing and the former subsidiary of Boeing located in Wichita, Kansas, was spun off in 2005. Spirit Aero Systems produces fuselages among other parts.

All these being changed inside the organization, Boeing launched the 737 MAX family—a rival to the Airbus A320 family and a successor to the older 737 aircraft—quickly gained a lot of popularity. Boeing landed Thousands of 737 MAX aircraft, but shortly after the aircraft went into service in May 2017, the aircraft's promise became problematic for both Boeing and the aviation industry as a whole. Nearly a year later, all 189 individuals on board a Lion Air 737 MAX died in an October 2018 crash in Indonesia. After that, 157 people on board an Ethiopian Airlines 737 MAX perished in an accident in March 2019, which prompted regulators worldwide to stop MAX aircraft. A defect in a new technology that forced the aircraft's nose down to prevent stalling was the cause of the crashes. Even when there was no threat to the aircraft, the nose was forced downward due to faulty sensor data. Boeing was accused of hiding important details about the system from the Federal Aviation Administration (FAA) that would have necessitated further pilot training. Boeing consented to pay fines totaling $2.5 billion. The 737 MAX was cleared by the FAA in November 2020 and by the Aviation Safety Agency of the EU in January 2021, following months of investigations, corrections, and testing. 

After a couple of years of regaining trust, the January 2024 incident of Alaska Airlines in which the MAX jet’s panel blew out mid-air fueled the issue. It forced the US lawmakers to reconsider the 2021 agreement. US legislators questioned Boeing CEO Dave Calhoun in June about the company's dismal safety record. Attorneys for the relatives of the victims have pushed the Justice Department to bring charges against the plane maker and levy a punishment of up to $24.78 billion, citing criticism from Capitol Hill. 

Justice Department representatives will provide Boeing until July 7 to react to the plea deal, which they will declare to be non-negotiable. Prosecutors indicated they would try Boeing to trial if the firm refused to enter a guilty plea.  Whether Boeing accepts the plea deal or not, the impact on the airline industry due to the unfavorable incidents brought up by the company is unignorable. The challenge is immense for Boeing even though the plea deal does not seem to pose too much harm to the operations of the company. However, the current occurrences will make a great lesson for any airline company for the years to come. 

Aong Cha Ching Marma is a Research Assistant at CGS

The views expressed in these write-up are solely those of the author and do not necessarily reflect the policies of CGS.