Boeing (BA) Strikes Deal to Avoid Prosecution Over Deadly 737 Max Crashes
Boeing Co. (BA) has reached a deal with the U.S. Justice Department that will see the commercial aircraft manufacturer avoid prosecution over two crashes of its 737 Max airplanes that killed 346 people.
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The decision means Boeing won't face a trial as scheduled next month, which crash victims' families have demanded for years. The 'non-prosecution agreement' allows Boeing, a major U.S. military contractor and leading U.S. exporter, to avoid being labeled a 'felon.'
Officials with the Department of Justice say they met with crash victims' family members last week ahead of the deal being announced. In a court filing, the Justice Department said it 'is the government's judgment that the agreement is a fair and just resolution that serves the public interest.'
Hefty Fines
Under terms of the deal, Boeing must 'pay or invest' more than $1.1 billion, including a $487.2 million criminal fine. The hefty payment also includes $444.5 million for a new fund for crash victims, and $445 million more that will go towards compliance, safety, and quality programs.
Boeing has been trying for years to put the two crashes of its best-selling Max airplanes — a Lion Air flight in October 2018 and an Ethiopian Airlines flight less than five months later — behind it. The Max aircraft were grounded worldwide for nearly two years after the second crash.
Families of crash victims have criticized previous government agreements with Boeing as 'sweetheart deals,' and demanded accountability from the company and that its executives stand trial for the crashes. Several victim family members issued a statement shortly after the latest deal was announced, criticizing it and saying that it sets a dangerous precedent. BA stock has gained 14% this year.
Is BA Stock a Buy?
The stock of Boeing Co. has a consensus Moderate Buy rating among 20 Wall Street analysts. That rating is based on 15 Buy, four Hold, and one Sell recommendations assigned in the last three months. The average BA price target of $213.37 implies 5.44% upside from current levels.
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