Multi-million dollar pledge by Boeing for 737 MAX crash-related support

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Boeing will give $100 million over multiple years to local governments and non-profit organizations to help families and communities affected by the deadly crashes of  737 MAX aircraft in Indonesia and Ethiopia.

The move appears to be a step toward repairing the image of the world’s largest aircraft manufacturer, severely dented by the crash of an Ethiopian Airlines plane in March five months after a crash of a Lion Air flight in Indonesia.

The crashes killed a total of 346 people.

Boeing is the target of a US Department of Justice criminal investigation into development of the 737 MAX, regulatory probes and more than 100 lawsuits by victims’ families.

The multi-year pay-out is independent of lawsuits and would not impact on litigation, a Boeing spokesman said.

The $100 million, less than the list price of a 737 MAX 8, is meant to help with education and living expenses and to spur economic development in affected communities, Boeing said. It did not specify which authorities or organisations would receive the money.

Many passengers on board the Ethiopian Airlines flight were aid workers or involved with health, food, or environmental programmes.

“If the money is spent on furthering the work of people on that airplane it would be money well spent,” said Justin Green, a New York-based attorney representing several Ethiopia crash victims.

He said the fund would not affect his clients’ courtroom strategy: “What families want to know is why this happened. Could this have been avoided?”

Anton Sahadi, a representative of relatives of the Lion Air crash victims, said families appreciated the $100 million fund but it did not mean they would stop lawsuits.

“We will continue to fight for our rights in the courts,” he said. “Boeing is doing this to rebuild their image.”

CHARM OFFENSIVE

After the Lion Air crash on October 29 Boeing started developing a software fix on a stall-prevention system called MCAS believed to have played a role in that disaster and the Ethiopian crash.

The 737 MAX was grounded worldwide after the second crash and regulators must approve the fix and new pilot training before the jets fly again.

Last month regulators identified a new problem that will delay commercial flights until October at the earliest.

Boeing is in settlement talks over the Lion Air litigation and has separately offered to negotiate with families of Ethiopian Airlines victims, but some families said they are not ready to settle, exposing the aircraft manufacturer to a lengthy court battle.

“The Boeing brand is worth far more than $100 million and the board and executive leadership understand what is at stake,” said William Klepper, a Columbia Business School professor.

Following an initial response public relations experts criticised as stilted and lawyer-driven, Boeing went on a charm offensive, with executives at the Paris Airshow last month repeatedly apologising for the loss of life. Boeing Chief Executive Officer Dennis Muilenburg posts regular Twitter updates on efforts to safely return the 737 MAX to service and win back public confidence.

Robert Clifford, a Chicago-based attorney with several Ethiopian crash cases, suggested some of Boeing’s $100 million pledge could be spent assisting efforts to return victim remains to their families.

“These families are distraught about the effort to get back their loved ones,” Clifford said. “They want closure.”

Boeing offered to match employee donations in support of the families and communities impacted by the accidents through December.