Families Of Boeing 737 MAX Victims To Get $500 Million Compensation

A fund to compensate families of the victims of the two Boeing 737 MAX aircraft crashes has opened in the US. The fund, worth $500 million, will be administered to the heirs, relatives and beneficiaries of the passengers who died in the two incidents. Families have until mid-October to submit their claims.

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A new fund has opened to pay compensation to families of the victims of the MAX disaster. Photo: Vincenzo Pace | Simple Flying

Families to get $1.45 million each

The twin Boeing 737 MAX disasters claimed the lives of 346 people in 2018 and 2019. All passengers and crew onboard Lion Air flight 610 and Ethiopian Airlines flight 320 died in the tragedies, events which saw the aircraft grounded for over two years. Since the disasters, relatives of the deceased have campaigned tirelessly for justice, including reforms to the way aircraft are certified.

This week, a compensation fund has opened in the US to provide financially for those affected by the loss of their loved ones. The fund, according to Reuters, is worth $500 million, and will be distributed to families on a rolling basis as their claims are submitted.

According to the claim administrators Ken Fienberg and Camille Biros, each family will receive a sum of almost $1.45 million. Families will be given until October 15th to submit their claim forms.

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Boeing’s entire settlement totaled $2.5 billion. Photo: Boeing

Part of a $2.5 billion settlement

The compensation fund is a part of a much larger settlement agreed upon between Boeing and the Justice Department in January. Prosecutors charged the planemaker with fraud relating to the certification of the 737 MAX. By agreeing to pay a $2.5 billion settlement, Boeing avoided criminal prosecution.

However, this did not avoid civil litigation being brought against Boeing by the victim’s families. These claims are ongoing, and the $500 million released this week will go towards settling these cases.

It’s the second time Feinberg and Biros have overseen compensation payment for Boeing. The pair administered a $50 million fund back in July 2019 for the crash families, which is separate from this latest release of funds. The distribution will, however, follow a similar format to the previous fund.

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The Boeing 737 MAX’s grounding period lasted nearly two years. Photo: Vincenzo Pace | Simple Flying

Included in the overall $2.5 billion settlement is a fine of $243.6 million, as well as compensation paid to airlines of $1.77 billion relating to the fraud charges. However, Boeing has also had to pay other costs to airline customers relating to the grounding of the aircraft, delays to deliveries and the subsequent loss of earnings.

Does it go far enough?

Most of the Lion Air-related lawsuits have already been settled, but relatives of the Ethiopian Airlines crash victims continue to press for answers on why the plane was allowed to continue to fly after the first crash. Michael Stumo, the father of 24-year-old Samya who died in the Ethiopian crash, has been leading the charge against the planemaker and the FAA. Speaking to the Guardian earlier this year, he said,

“We know that instead of doing something after the first crash they fired up the public relations team to blame others and made false assertions of safety while collecting their board checks and stock options.”

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Mr Stumo has campaigned tirelessly for justice after the loss of his daughter. Photo: Getty Images

Stumo has been pushing for more dismissals at Boeing and the FAA, despite numerous changes already taking place on Boeing’s leadership team. Just weeks ago, Ali Bahrami, who headed the FAA’s safety team, announced his retirement at the end of this month.

But Stumo and the other families want more heads to roll, specifically Larry Kellner, the ex-Continental CEO and chairman of the board, as well as Edmund Giambastiani, who heads the board’s safety panel.

But the re-election of the board in April saw both Kellner and Giambastiani, along with eight other existing Boeing board members, re-elected for another term. Despite compensation payments going ahead, it seems we’re not yet done with the conflict caused by the 737 MAX.

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