Published: Thu, July 04, 2019
Global News | By Blake Casey

Embattled Boeing to give $100 mn to 737 MAX crash victims' families

Embattled Boeing to give $100 mn to 737 MAX crash victims' families

The multi-year payout is independent of the lawsuits and would have no impact on litigation, a Boeing spokesman said.

The $100 million is meant to help with education and living expenses and to spur economic development in affected communities, Boeing said, without specifying which authorities or organizations would receive the money. 'We are focused on re-earning that trust and confidence from our customers and the flying public in the months ahead'.

Muilenburg addressed the additional complication with the 737 Max aircraft, which has been grounded since March, in a video he uploaded to his Twitter account Wednesday.

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

The airframer began updating the software after the crash of a Lion Air 737 MAX 8 off Indonesia in October 2018.

The company is also allowing its employees to make donations to the families and communities affected by the crashes.

A note earlier this week from JPMorgan Chase said further production cuts were possible in light of "heightened risk around timing" of the 737 MAX return.

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Robert Clifford, a Chicago lawyer who has filed suit on behalf of 23 victims in the second crash, called the new offer by Boeing "highly unusual". It also remains unclear how much Boeing will need to pay to carriers like American Airlines that have been forced to cancel flights as a result of the halt in service.

Both crashes involved Boeing's 737 MAX planes.

Besides working on advancing and testing its software update, Muilenburg said the company is now adjusting its production system temporarily to accommodate the "pause" in MAX deliveries.

Wall Street analysts have lowered their near-term profit targets on Boeing, due mainly to a halt in deliveries in new 737 MAX planes that has caused the company to cut production of the planes from 52 to 42.

Although investigations continue, MCAS, an automated anti-stall system, has been implicated in both crashes, amid concern it repeatedly pushed the nose of the aircraft down, despite the pilots' efforts.

"We know every person who steps aboard one of our airplanes places their trust in us", Dennis Muilenburg, the company's chairman, president and chief executive, said in a statement.

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