Boeing to pay US$6.6m to FAA over failure to meet safety regulations

written by Hannah Dowling | February 26, 2021

Boeing has been ordered to pay US$6.6 million to the US Federal Aviation Administration over its failure to comply with a 2015 safety agreement, in which the planemaker pledged to improve safety oversight processes.

The penalty consists of a US$5.4 million fine for not complying with the agreement, and a further US$1.21 million settlement of two pending FAA enforcement cases.

“The FAA is holding Boeing accountable by imposing additional penalties,” FAA administrator Steve Dickson said in a statement.

Boeing previously paid US$12 million in 2015 as a part of the settlement.

A spokesperson for Boeing said that the planemaker is working to strengthen its processes and prioritise regulatory compliance “to ensure we hold ourselves accountable to the highest standards of safety and quality”.

The spokesperson said that the settlement deal “fairly resolves previously-announced civil penalty actions while accounting for ongoing safety, quality and compliance process improvements”.

Sources suggest today’s announcement could be the least of Boeing’s financial worries, as costs of its ongoing inspection program for parked Boeing 787 Dreamliners continue to rack up.

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Over the last year, many structural flaws have been located within newly-built Dreamliners, which has seen Boeing refrain from making any 787 deliveries for the last three months as it conducts quality-control inspections.

Sources suggest the inspections and retrofits could take up to one month per plane, of which 88 are currently parked at Boeing’s facility, with the program set to cost the planemaker millions, if not billions, depending on how many planes are affected, and how severely.

It follows a slew of bad news for Boeing’s balance sheet.

Earlier in the month, the US Federal Aviation Administration issued an airworthiness directive demanding inspection of over 200 Boeing 787 Dreamliners, after new defects were located.

The directive was issued following reports of torn decompression panels in the bilge area, according to the regulator. The issue essentially pertains to the panels that separate the bottom of the passenger cabin from the cargo hold underneath.

The FAA estimated the directive will affect 222 Dreamliner aircraft in the US.

Two weeks earlier, Boeing reported a record annual loss of US$12 billion, as well as a hefty US$6.5 billion hit to its 777X program, which it delayed an additional year, following a previously-announced two-year delay.

The company’s net loss rose to US$8.44 billion in the fourth quarter ending 31 December, from US$1.01 billion a year earlier, taking its full-year loss to a record US$11.94 billion.

Meanwhile, revenue fell 15 per cent to US$15.3 billion in the quarter.

2 Comments

  • Cyrus Lesser

    says:

    What a spectacular fall from grace – Boeing used to be the gold standard. Hubris has cost lives. Let’s put engineers back in charge instead of accountants. They’ll know what has to be given priority.

  • Darren McLeod

    says:

    What was the reason for Boeing’s latest failure to meet the safety requirements?

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