Boeing Charged with 737 Max Fraud Conspiracy and Agrees to Pay over $2.5 Billion

The Boeing Company (Boeing) has entered into an agreement with the Department of Justice to resolve a criminal charge related to a conspiracy to defraud the Federal Aviation Administration’s Aircraft Evaluation Group (FAA AEG) in connection with the FAA AEG’s evaluation of Boeing’s 737 MAX airplane.

Boeing, a U.S.-based multinational corporation that designs, manufactures, and sells commercial airplanes to airlines worldwide, entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the Northern District of Texas. The criminal information charges the company with one count of conspiracy to defraud the United States. Under the terms of the DPA, Boeing will pay a total criminal monetary amount of over $2.5 billion, composed of a criminal monetary penalty of $243.6 million, compensation payments to Boeing’s 737 MAX airline customers of $1.77 billion, and the establishment of a $500 million crash-victim beneficiaries fund to compensate the heirs, relatives, and legal beneficiaries of the 346 passengers who died in the Boeing 737 MAX crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302.

“The tragic crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers,” said Acting Assistant Attorney General David P. Burns of the Justice Department’s Criminal Division. “Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 Max airplane and engaging in an effort to cover up their deception. This resolution holds Boeing accountable for its employees’ criminal misconduct, addresses the financial impact to Boeing’s airline customers, and hopefully provides some measure of compensation to the crash-victims’ families and beneficiaries.”

“The misleading statements, half-truths, and omissions communicated by Boeing employees to the FAA impeded the government’s ability to ensure the safety of the flying public,” said U.S. Attorney Erin Nealy Cox for the Northern District of Texas. “This case sends a clear message: The Department of Justice will hold manufacturers like Boeing accountable for defrauding regulators – especially in industries where the stakes are this high.”

“Today’s deferred prosecution agreement holds Boeing and its employees accountable for their lack of candor with the FAA regarding MCAS,” said Special Agent in Charge Emmerson Buie Jr. of the FBI’s Chicago Field Office. “The substantial penalties and compensation Boeing will pay, demonstrate the consequences of failing to be fully transparent with government regulators. The public should be confident that government regulators are effectively doing their job, and those they regulate are being truthful and transparent.”

“We continue to mourn alongside the families, loved ones, and friends of the 346 individuals who perished on Lion Air Flight 610 and Ethiopian Airlines Flight 302. The deferred prosecution agreement reached today with The Boeing Company is the result of the Office of Inspector General’s dedicated work with our law enforcement and prosecutorial partners,” said Special Agent in Charge Andrea M. Kropf, Department of Transportation Office of Inspector General (DOT-OIG) Midwestern Region. “This landmark deferred prosecution agreement will forever serve as a stark reminder of the paramount importance of safety in the commercial aviation industry, and that integrity and transparency may never be sacrificed for efficiency or profit.”

As Boeing admitted in court documents, Boeing—through two of its 737 MAX Flight Technical Pilots—deceived the FAA AEG about an important aircraft part called the Maneuvering Characteristics Augmentation System (MCAS) that impacted the flight control system of the Boeing 737 MAX. Because of their deception, a key document published by the FAA AEG lacked information about MCAS, and in turn, airplane manuals and pilot-training materials for U.S.-based airlines lacked information about MCAS.

Boeing began developing and marketing the 737 MAX in or around June 2011. Before any U.S.-based airline could operate the new 737 MAX, U.S. regulations required the FAA to evaluate and approve the airplane for commercial use.

In connection with this process, the FAA AEG was principally responsible for determining the minimum level of pilot training required for a pilot to fly the 737 MAX for a U.S.-based airline, based on the nature and extent of the differences between the 737 MAX and the prior version of Boeing’s 737 airplane, the 737 Next Generation (NG). At the conclusion of this evaluation, the FAA AEG published the 737 MAX Flight Standardization Board Report (FSB Report), which contained relevant information about certain aircraft parts and systems that Boeing was required to incorporate into airplane manuals and pilot-training materials for all U.S.-based airlines. The 737 MAX FSB Report also contained the FAA AEG’s differences-training determination. After the 737 MAX FSB Report was published, Boeing’s airline customers were permitted to fly the 737 MAX.

Within Boeing, the 737 MAX Flight Technical Team (composed of 737 MAX Flight Technical Pilots) was principally responsible for identifying and providing to the FAA AEG all information that was relevant to the FAA AEG in connection with the FAA AEG’s publication of the 737 MAX FSB Report. Because flight controls were vital to flying modern commercial airplanes, differences between the flight controls of the 737 NG and the 737 MAX were especially important to the FAA AEG for purposes of its publication of the 737 MAX FSB Report and the FAA AEG’s differences-training determination.

In and around November 2016, two of Boeing’s 737 MAX Flight Technical Pilots, one who was then the 737 MAX Chief Technical Pilot and another who would later become the 737 MAX Chief Technical Pilot, discovered information about an important change to MCAS. Rather than sharing information about this change with the FAA AEG, Boeing, through these two 737 MAX Flight Technical Pilots, concealed this information and deceived the FAA AEG about MCAS. Because of this deceit, the FAA AEG deleted all information about MCAS from the final version of the 737 MAX FSB Report published in July 2017. In turn, airplane manuals and pilot training materials for U.S.-based airlines lacked information about MCAS, and pilots flying the 737 MAX for Boeing’s airline customers were not provided any information about MCAS in their manuals and training materials.

On Oct. 29, 2018, Lion Air Flight 610, a Boeing 737 MAX, crashed shortly after takeoff into the Java Sea near Indonesia. All 189 passengers and crew on board died. Following the Lion Air crash, the FAA AEG learned that MCAS activated during the flight and may have played a role in the crash. The FAA AEG also learned for the first time about the change to MCAS, including the information about MCAS that Boeing concealed from the FAA AEG. Meanwhile, while investigations into the Lion Air crash continued, the two 737 MAX Flight Technical Pilots continued misleading others—including at Boeing and the FAA—about their prior knowledge of the change to MCAS.

On March 10, 2019, Ethiopian Airlines Flight 302, a Boeing 737 MAX, crashed shortly after takeoff near Ejere, Ethiopia. All 157 passengers and crew on board died. Following the Ethiopian Airlines crash, the FAA AEG learned that MCAS activated during the flight and may have played a role in the crash. On March 13, 2019, the 737 MAX was officially grounded in the U.S., indefinitely halting further flights of this airplane by any U.S.-based airline.

As part of the DPA, Boeing has agreed, among other things, to continue to cooperate with the Fraud Section in any ongoing or future investigations and prosecutions. As part of its cooperation, Boeing is required to report any evidence or allegation of a violation of U.S. fraud laws committed by Boeing’s employees or agents upon any domestic or foreign government agency (including the FAA), regulator, or any of Boeing’s airline customers. In addition, Boeing has agreed to strengthen its compliance program and to enhanced compliance program reporting requirements, which require Boeing to meet with the Fraud Section at least quarterly and to submit yearly reports to the Fraud Section regarding the status of its remediation efforts, the results of its testing of its compliance program, and its proposals to ensure that its compliance program is reasonably designed, implemented, and enforced so that it is effective at deterring and detecting violations of U.S. fraud laws in connection with interactions with any domestic or foreign government agency (including the FAA), regulator, or any of its airline customers.

The department reached this resolution with Boeing based on a number of factors, including the nature and seriousness of the offense conduct; Boeing’s failure to timely and voluntarily self‑disclose the offense conduct to the department; and Boeing’s prior history, including a civil FAA settlement agreement from 2015 related to safety and quality issues concerning the Boeing’s Commercial Airplanes (BCA) business unit. In addition, while Boeing’s cooperation ultimately included voluntarily and proactively identifying to the Fraud Section potentially significant documents and Boeing witnesses, and voluntarily organizing voluminous evidence that Boeing was obligated to produce, such cooperation, however, was delayed and only began after the first six months of the Fraud Section’s investigation, during which time Boeing’s response frustrated the Fraud Section’s investigation.

The department also considered that Boeing engaged in remedial measures after the offense conduct, including:  (i) creating a permanent aerospace safety committee of the Board of Directors to oversee Boeing’s policies and procedures governing safety and its interactions with the FAA and other government agencies and regulators; (ii) creating a Product and Services Safety organization to strengthen and centralize the safety-related functions that were previously located across Boeing; (iii) reorganizing Boeing’s engineering function to have all Boeing engineers, as well as Boeing’s Flight Technical Team, report through Boeing’s chief engineer rather than to the business units; and (iv) making structural changes to Boeing’s Flight Technical Team to increase the supervision, effectiveness, and professionalism of Boeing’s Flight Technical Pilots, including moving Boeing’s Flight Technical Team under the same organizational umbrella as Boeing’s Flight Test Team, and adopting new policies and procedures and conducting training to clarify expectations and requirements governing communications between Boeing’s Flight Technical Pilots and regulatory authorities, including specifically the FAA AEG. Boeing also made significant changes to its top leadership since the offense occurred.

The department ultimately determined that an independent compliance monitor was unnecessary based on the following factors, among others: (i) the misconduct was neither pervasive across the organization, nor undertaken by a large number of employees, nor facilitated by senior management; (ii) although two of Boeing’s 737 MAX Flight Technical Pilots deceived the FAA AEG about MCAS by way of misleading statements, half-truths, and omissions, others in Boeing disclosed MCAS’s expanded operational scope to different FAA personnel who were responsible for determining whether the 737 MAX met U.S. federal airworthiness standards; (iii) the state of Boeing’s remedial improvements to its compliance program and internal controls; and (iv) Boeing’s agreement to enhanced compliance program reporting requirements, as described above.

The Chicago field offices of the FBI and the DOT-OIG investigated the case, with the assistance of other FBI and DOT-OIG field offices.

Airbus delivers the first A400M to the Belgian Air Force

The Belgian Air Force has taken delivery of its first of seven Airbus A400M military transport aircraft. The aircraft was handed over to the customer at the A400M Final Assembly Line in Seville (Spain) and subsequently performed its ferry flight to the 15th Wing Air Transport in Melsbroek (Belgium), where the aircraft will be based.

This A400M, known as MSN106, will be operated within a binational unit composed of a total of eight aircraft, seven from the Belgian Air Force and one from the Luxembourg Armed Forces.

The second A400M for Belgium will be delivered in early 2021.

“With the delivery of this aircraft all launch customers are now equipped with the A400M,” Alberto Gutierrez, head of Military Aircraft at Airbus Defence and Space, said. “MSN106 will join Luxemburg’s aircraft in the binational unit operated jointly with Belgium. Despite challenges due to Covid-19, our teams have achieved all 10 aircraft deliveries scheduled this year, bringing the global fleet in operation to 98 aircraft.”

The photograph above shows the Belgian A400M on its ferry flight towards Melsbroek (Belgium).

First ATR 72-600F Aircraft Delivered to FedEx Express

FedEx Express, a subsidiary of FedEx Corp. and the world’s largest express transportation company, announced the delivery of the first ATR 72-600F aircraft to its feeder aircraft network. The delivery of the new state-of-the-art freighter was made from ATR to FedEx in Toulouse, France.

“The arrival of the first ATR 72-600F is a major milestone in the modernization of our feeder aircraft fleet, and it positions us strongly to continue growing our global footprint and serve more customers in locations that aren’t always accessible by our larger jet fleet,” said Scot Struminger, EVP and CEO of Aviation, FedEx Express. “The ATR 72-600F was constructed with input from FedEx engineers every step of the way, so we’re proud and excited to finally take possession of this impressive aircraft.”

The ATR 72-600F is the first-ever production freighter built by ATR and can carry heavier payloads than ATRs converted from passenger configuration. The aircraft has a large cargo door, allowing for carriage of bulk cargo as well as Unit Load Device (ULD) configurations. It has a bulk capacity of 2,630 cubic feet (74.5 cubic meters), and when in ULD mode it can accommodate up to seven LD3 containers or five 88” x 108” pallets.

FedEx originally announced the purchase agreement with ATR in November 2017. Under the agreement, FedEx Express made a firm purchase of 30 ATR 72-600F aircraft with options to purchase up to 20 more. Subsequent deliveries will be about six aircraft per year over a five-year period. The first ATR aircraft will be operated by ASL Airlines Ireland, a FedEx ATR operator since 2000, as part of the FedEx Express Feeder fleet.

FedEx currently deploys 364 feeder aircraft operating in 56 countries. Most of these feeder aircraft are owned by FedEx and leased and operated by different third-party air carriers under their own operating certificates. The FedEx feeder fleet is comprised of aircraft under 60,000 pounds maximum gross take-off weight and allows the company to provide fast, economical services to small and medium-sized businesses around the world.

Volga-Dnepr Group Deploys its First Boeing 777F Across Worldwide Network

Volga-Dnepr Group (consisting of Volga-Dnepr Airlines, AirBridgeCargo Airlines, ATRAN Airlines), aviation logistics specialists, has phased in its first Boeing 777F. The freighter, which has been recently certified in Russia, will be part of AirBridgeCargo’s (ABC) fleet. 

Boeing 777F is being deployed on Trans-Siberian route, enabling ABC to offer more optimized delivery options for its customers. It is the largest twin-engine freighter with up to 106 tonnes of payload which complements ABC’s already extensive fleet of Boeing 747Fs and gives more flexibility in terms of special and general cargo transportation, the company says. 

“We would like to thank our personnel and specialists, partners and customers for this great milestone at the turn of 2021 when airfreight is in high demand, especially for healthcare, e-commerce and essential cargoes transportations,” Tatyana Arslanova, CEO of Volga-Dnepr Group, comments.  

Natalia Butrova, Logistics Leader Russia & CIS, GE Healthcare, adds: “Timely delivery of sophisticated medical equipment stays one of the top tasks during these difficult times. Time-wise, airfreight is the most preferred transportation mode, which, coupled with safety and security, is very important for us. For more than 30 years GE Healthcare has been providing sophisticated diagnostic medical equipment, including computerized tomographs and ultrasound systems. Thanks to our partnership the Russian doctors and patients could access essential technologies within the shortest timeframes.”   

“2020 has put the air cargo at the front. Air carriers continued delivering much-needed medical cargoes – PPE, vaccines, medicines, medical equipment and other items to combat COVID-19 spread. We are positive that the new freighter type within AirBridgeCargo’s fleet will open new opportunities for other carriers operating to/from Domodedovo airport,” says Igor Borisov, director of Domodedovo airport.

The first commercial flight en-route Seoul (South Korea) – Domodedovo (Moscow, Russia) was welcomed by the top management of Volga-Dnepr Group, Boeing Corporation and GE Healthcare. The guests were able to take a tour around the new plane and watch offloading of medical equipment.  

Paris Air Show Cancelled for 2021

The organizers of the Paris Air show have announced that in light of the uncertainty linked to the current COVID-19 health crisis, the 2021 Paris Air Show has been cancelled. The event was scheduled to take place from 21 to 27 June 2021.

Together with the Board of Directors of the GIFAS (French Aerospace Industries Association), the Board of Directors of the Paris Air Show has taken the decision in response to the international health crisis and the large number of visitors that this popular show attracts. The decision was agreed upon unanimously by the Paris Air Show Board members in the context of a crisis that has had an unprecedented impact on the aerospace industry.

The next edition of the Paris Air Show will be held in June 2023, at a date that will be announced shortly, the organizers say. Exhibitors will receive a full refund of all sums already paid and the Paris air Show says it will take full financial responsibility for the decision.

“We are obviously disappointed not to be able to hold the 2021 edition of the Paris Air Show. After many months of all trade show activities being suspended throughout the world, the entire international aerospace and defense community was very much looking forward to being able to meet. We have already started work to ensure that the 2023 edition celebrates the resurgence of the aerospace industry on an international scale,” explains Patrick Daher, chairman of the International Paris Air Show and Chairman of the Daher Group.

Gilles Fournier, CEO of the International Paris Air Show, adds, “We would like to extend a huge thank you to all of our partners, exhibitors and service providers for the trust they have placed in us. We share their disappointment, as the Paris Air Show continues to be an extremely popular event, even in periods of crisis. The 2023 edition will be larger than ever, and our teams are already working to ensure its success.”

Rheinland Air Service Appointed as the First German Dealer for the Bell 505

Bell Textron Inc. appointed Rheinland Air Service as the first German dealer for the Bell 505. Approaching 50 years of business aviation experience, RAS is a proven provider of expert aviation sales and service.

“We are pleased to announce RAS as Bell’s first authorized 505 dealership for Germany,” said Duncan Van De Velde, managing director, Europe & Russia. “This partnership has been highly valued as we continue to expand our footprint in Germany. With the Bell 505 dealership, we can use our customer collaboration to attract new owners and establish a stronger presence in the region.”

“This partnership is important for Bell’s work in Germany. We want to provide customers with a complete 505 solution through a local company in their national language,” said Patrick Moulay, SVP, International Business. “With its team’s experience in aviation and excellent reputation, we believe RAS is the best launch partner for the first 505 dealership.”

Located in Mönchengladbach, RAS will be home to the first ever Bell 505 dealership.  It was established in 1972 and employs 280 staff in four locations in Germany.

“We are proud to be part of the Bell family and represent the German market with this high performing aircraft. The Bell 505 is an incredible helicopter, and we see a huge potential for our German customers,” said Johannes Graf von Schaesberg, CEO, RAS. “The cooperation between Bell and RAS is our long-term vision to expand the German market for the Bell brand.” 

The Bell 505 is ideal for private charters, corporate executives, medical evacuations, utilities, public safety, pilot training, and more. The light single-engine helicopter offers a rare combination of rugged high performance, superior fuel efficiency, and a low cost of acquisition and operation. With the only dual-channel FADEC engine in its class, the helicopter has plenty of power at high altitudes. Additionally, the high-tech G1000H all glass flight deck and panoramic windows provide great visibility, full situational awareness, and safety.

Amentum Completes Acquisition of DynCorp

Amentum, a contractor to U.S. federal and allied governments, announced that it has closed the acquisition of DynCorp International, a provider of sophisticated aviation, logistics, training, intelligence and operational solutions in over 30 countries worldwide. The deal has accelerated Amentum’s growth into new markets, enhanced and added to its industry leading capabilities, and furthered Amentum’s offering of differentiated solutions to its customers’ most challenging missions. The combination has also created one of the largest providers of mission critical support services to government customers, with 34,000 team members in 105 countries around the world.

“The addition of DynCorp International will make us a powerhouse with an enduring mission focus and market-leading positions in several key areas,” said John Vollmer, Amentum’s CEO. “The enhanced size, scope, and footprint of the combined organization will help ensure sustained delivery excellence to our customers and allow us to pursue transformational opportunities in the market.”

The financial terms of the transaction, originally announced on Sept. 24, were not disclosed.

FAA Says Boeing 737 Max Can Return to Service

FAA Administrator Steve Dickson signed an order that paves the way for the Boeing 737 MAX to return to commercial service. The FAA says Administrator Dickson’s action followed a comprehensive and methodical safety review process that took 20 months to complete. During that time, FAA says their employees worked diligently to identify and address the safety issues that played a role in the tragic loss of 346 lives aboard Lion Air Flight 610 and Ethiopian Airlines Flight 302. Throughout the transparent process, the FAA says they cooperated closely with other countries regulatory counterparts on every aspect of the return to service. Additionally, Administrator Dickson personally took the recommended pilot training and piloted the Boeing 737 MAX, so he could experience the handling of the aircraft firsthand.

In addition to rescinding the order that grounded the aircraft, the FAA also published an Airworthiness Directive specifying design changes that must be made before the aircraft returns to service, issued a Continued Airworthiness Notification to the International Community (CANIC), and published the MAX training requirements. These actions do not allow the MAX to return immediately to the skies. The FAA must approve 737 MAX pilot training program revisions for each U.S. airline operating the MAX and will retain its authority to issue airworthiness certificates and export certificates of airworthiness for all new 737 MAX aircraft manufactured since the FAA issued the grounding order. Furthermore, airlines that have parked their MAX aircraft must take required maintenance steps to prepare them to fly again.

Airbus Signs Contract with Germany for 38 Eurofighters

Airbus has signed a contract to deliver 38 new Eurofighter aircraft to the German Air Force. This makes Germany the largest ordering nation in Europe’s biggest defense program. The order, also known by its project name Quadriga, covers the delivery of 30 single-seater and eight twin-seater Eurofighters. Three of the aircraft will be equipped with additional test installations as Instrumented Test Aircraft for the further development of the Eurofighter program. 
“The new Tranche 4 Eurofighter is currently the most modern European-built combat aircraft with a service life well beyond 2060,” Dirk Hoke, CEO Airbus Defence and Space, said. “Its technical capabilities will allow full integration into the European Future Combat Air System FCAS”.

The renewed order from Germany secures production until 2030 and comes at a strategically important time for the program. In addition to an expected Eurofighter order from Spain to replace its legacy F-18s, procurement decisions in Switzerland and Finland are imminent in 2021. 

The variant offered in Switzerland corresponds to the configuration of the German Quadriga order. The equipment includes the world’s latest electronic radar, future-proof hardware and software and unlimited multi-role capability for engaging air and ground target.

Eurofighter is Europe’s largest defense program, in which the United Kingdom, Spain and Italy are involved alongside Germany. In addition to technological capabilities, it secures more than 100,000 jobs in Europe

Aerospace Tech Week Joins Praise for Covid-19 Vaccine to Get Aviation Industry Moving Again

Organisers of Aerospace Tech Week, premier exhibition and conference for the aerospace technology community, have welcomed the news of the potential Covid-19 vaccine as an opportunity to get the devastated aviation industry moving again.

Since the initial lockdowns and grounding of aircraft across Europe in March, the air transport industry has struggled to get moving again due to continued travel restrictions and concerns of travellers, despite the industry demonstrating its excellent safety and clean cabin air through use of high quality HEPA filters.

Air transport continues to be around half of its pre-pandemic levels and has created turbulence and uncertainty, but with a possible vaccine on the horizon has been given a confidence boost that the industry can begin to look forward to better times.

With many airlines being provided financial support from Government’s, many of these are linked to reducing the environmental impact of aviation. Technology and developments in engineering solutions will be key factors in enhancing the sectors green comeback, with Aerospace Tech Week showcasing much of this latest tech.

Adrian Broadbent, CEO and owner of Aerospace Tech Week and Aerospace Tech Review magazine, said, “We are very encouraged by the announcement of a possible Covid-19 vaccine to build confidence in all industries, and especially the hard hit aviation industry.”

“We hope this enables future investment to thrive in new technologies, cleaner aircraft and improved solutions for the sector to demonstrate its commitment to cleaner skies. Aerospace Tech Week will enable many of these technologies to be showcased and we look forward to welcoming the industry to Toulouse on 26th-27th May 2021 for an exciting and safe back-to-business environment.” Continued Mr Broadbent.

Further details, including international expert speakers, will be announced soon at www.AerospaceTechWeek.com.

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