Comair optimistic about $83m claim against Boeing despite US rulings

A lawyer wrapping up the affairs of bankrupt Comair is confident a breach-of-contract dispute with Boeing will succeed despite a US judge ruling against LOT Poland and Smartwings in a similar claim.

Comair filed claims in a US federal court in Washington on February 6 seeking $83m, citing fraud and a breach of contract linked to its purchase of eight Boeing MAX airliners. The airline has accused Boeing of seeking profits over safety.

The US airline manufacturer faces billions of dollars in claims from operators worldwide after the two Boeing MAX 8 accidents in 2019 in which 346 people were killed. The airliner was grounded after the flight control system known as the movement characteristics augmentation system (MCAS) malfunctioned in two MAX 8s.

But a US judge has ruled that similar lawsuits against Boeing by LOT Polish Airlines and Smartwings could not go ahead. Reuters has reported that LOT and Smartwings wanted to be declared crime victims in these compensation cases, but the judge disagreed.

Had they been categorised as victims, families and other parties would have been able to claim more damages than otherwise from Boeing.

Comair liquidator Cloete Murray said the decision in Seattle had no bearing on their case.

“The litigation these parties instituted [was] in terms of the victims’ rights legislation in the US that affords ‘victims’ certain rights in the event a crime was committed against them,” said Murray.

“The basis of our claim against Boeing is very different and is based on a contractual and fraudulent misrepresentation committed on Comair by Boeing during the period when the 737 MAX 8s were sold to Comair,” he said. “We are not claiming to be victims.”

Cancelled order

Comair said it relied on “Boeing’s misrepresentations and concealment of material facts in deciding to purchase eight B737 MAX aircraft”. Comair had already paid Boeing $45m up front, and the first B737-MAX was delivered in February 2019.

Comair cancelled its order soon after as it slipped into business rescue.

The cases arise from two accidents: Indonesia’s Lion Air Flight 610, which crashed on October 29 2018, followed by Ethiopian Airlines Flight 302, which went down on March 10 2019.

The American Federal Aviation Administration eventually grounded the aircraft, causing billions of dollars in losses for operators and the manufacturer. Investigations found that the Chicago-based manufacturer had covered up the defect and the probe also fingered the Federal Aviation Administration (FAA) for lapses in safety oversight.

Boeing paid $2.5bn in compensation to settle a fraud conspiracy case. Investigations have since revealed that the FAA and Boeing colluded in the certification and test flights of the MAX 8, then tried to cover up revelations by whistle-blowers about the flights.