Boeing Agrees to Pay $12 Million and Enhance its Compliance Systems to Settle Enforcement Cases
Image: Boeing
December 30, 2015

The Federal Aviation Administration (FAA) has announced a comprehensive settlement agreement with Boeing Commercial Airplanes (BCA) that resolves multiple pending and potential enforcement cases.

Under the agreement, BCA pledged to implement and improve several certification processes to further enhance the airworthiness and continued compliance of all Boeing products.

"It is imperative that everyone complies with our aviation system's high safety standards," said U.S. Transportation Secretary Anthony Foxx. "This agreement is an important step toward ensuring that Boeing fully meets all applicable compliance standards going forward."

"Compliance requires all certificate holders to develop and implement internal controls that ensure they're operating according to the highest standards," said FAA Administrator Michael Huerta. "Boeing has agreed to implement improvements in its design, planning, production and maintenance planning processes, and has already implemented several of these improvements."

According to the FAA, Boeing's obligations commit the company to meeting specific performance targets that are designed to enhance the company's early discovery and self-disclosure of potential regulatory compliance problems, as well as the timely development and implementation of effective corrective actions.

Boeing must also make an immediate payment to the United States Treasury in the amount of $12 million. The company faces stiff penalties if it doesn't follow through on its commitments.

Per the terms of the agreement, Boeing will face up to $24 million in additional penalties over the next five years if it fails to implement its obligations.

The FAA says that the agreement with BCA settles two initiated cases and 11 other matters that were opened during the last several years. The first initiated case involved Boeing's tardiness in developing information for the installation of fuel tank flammability reduction equipment on Boeing 747 and 757 aircraft. The second initiated case involved the company's insufficient corrective action after discovering that a supplier had been providing incorrectly shaped fasteners. The FAA did not allege that these issues created unsafe conditions.

The uninitiated matters involved allegations of delays in submitting required safety information, production quality control problems, and failures to implement corrective actions for those production problems, according to the FAA.

The performance period for Boeing's commitments begins on January 1, 2016, and will continue for five years unless the FAA and BCA agree to an extension.