It was a key moment for the company on Friday when the jury in this high-profile matter absolved Boeing of any liability. The decision not only trims the risk but also defines the terrain as the planemaker is put under the microscope and vying with Airbus for orders.
What the jury decided
After a two-week trial in a Seattle federal court, jurors put an end to LOT’s fraud allegations and came down on Boeing’s side. They only had to deliberate for about three hours. It all came down to whether the maker had been up to something with the 737 MAX’s flight-control systems.
Boeing is pleased with the result. “We are gratified by the jury’s verdict in our favor today,” one of their people put it. For its part, LOT has put out a statement: “As the legal process may not yet be concluded, we will not comment further on the details of the proceeding at this stage.”
The highlights:
– No liability for lost revenue, per the jury
– A roughly two-week trial in Seattle
– Some three hours of deliberation
– 20 months of 737 MAX being on the ground
LOT’s claims and the money at stake
When LOT filed suit back in 2021, it was because it believed Boeing had made “purposeful and negligent” misrepresentations about the 737 MAX. The airline’s position was that Boeing was holding back on a significant change to the plane’s controls.
The numbers have changed a bit. The original filing asked for $250 million in what was left on the table in terms of income. On top of that, there was a $153 million claim for damages, with the global grounding of the MAX being the reason why.
According to LOT, having to nix flights, put in substitute planes, make good with passengers and take on extra costs was the toll of the grounding. Boeing has stood its ground, saying it did no such thing as cover up anything of import with airlines or regulators.
Crash legacy and a 20-month grounding
You can’t have this lawsuit without the two tragedies that put the industry on notice. First, Lion Air 610 went down in the Java Sea in 2018 with 189 on board. Then in 2019, Ethiopian 302 was lost after it left the ground, 157 of them.
In all, 346 were killed and the 737 MAX was pulled from service around the world for 20 months. Boeing has since come to terms with the fact that its MCAS system was a factor. There has been no shortage of hard looks at the company, including a $2.5 billion deal with the Justice Department in 2021 to put an end to fraud conspiracy charges over how the plane was certified.
A strategic win amid Airbus pressure
There is more to it than just the courtroom. In its suit, LOT said Boeing was in a hurry to put the MAX in front of the A320neo and didn’t let on about the MCAS. The jury may have thrown out the fraud angle, but the case is a reminder of how much is on the line when it comes to being seen as safe.
This is the first of these 737 MAX cases to see a full run in a US court. You can bet the airlines and the investment community will be watching to see if Boeing can keep the damage done and hold its own with Airbus.
Operators, risk, and what comes next
LOT is still flying 737 MAXs. For any carrier, the kind of headaches you hear about in court – planning for capacity, the cost of a lease, making right with a customer – are part of the job. This doesn’t unring the bell of the grounding, but it does put a cap on what Boeing has to answer for here.
Then again, LOT has let on that they’re not done. We’ll have to wait and see if this is the end of it or the start of a protracted fight over who is on the hook for the MAX mess.
