It followed an incident where the four-year-old suffered second-degree burns to his thigh and permanent scars when a cup of water spilled on him after his baby brother kicked his tray on a flight from Dublin to New York in June 2014.
The settlement has been valued at $700,000 (€627,000) and will see the boy receiving staggered payments when he becomes an adult.
It is the second personal injuries case the national flag carrier has faced in the US in the past year involving hot liquid spilling on a child. A case involving a girl in Florida has also been settled.
The boy in the New York case cannot be identified.
His mother sued Aer Lingus on the boy’s behalf late last year. The airline denied liability, but agreed to enter settlement discussions.
According to court filings, John Maggio, a New York lawyer representing Aer Lingus, wrote to the judge handling the case last month advising that the matter had been settled.
Injuries
In a complaint made on the boy’s behalf, the scalding incident happened during a flight on June 30, 2014. The boy suffered second-degree burns to his right inner thigh, extending to his scrotal area.
After the flight touched down at John F Kennedy International Airport, the boy was taken to the burns unit of the New York Presbyterian Hospital and remained there for four days, undergoing procedures to remove dead, damaged and infected tissues.
The incident left him with permanent scarring, which is expected to lessen over time.
Lawyers for the boy had argued that it was “immaterial” that his brother had kicked the cup. They alleged Aer Lingus was “complicit” in the incident.
Abram Bohrer, a lawyer for the boy, said he was “healthy and well-adjusted” and had “made age-appropriate milestones and can participate in all school and sports activities”.
He said the physical injuries had largely healed and required no immediate medical treatment.
The lawyer said that should the boy choose to undergo cosmetic surgery later in life, the settlement will give him the means to do so.
According to Mr Bohrer, the airline initially sought to limit the value of any settlement to $156,000 (€140,000).
The eventual settlement was reached after the boy was examined by a physician retained by Aer Lingus.
Payments
Under the terms of the agreement, $465,459 (€417,000) is to be paid into an annuity fund administered by an insurance company, while the law firm acting for the boy is to be paid $234,500 (€210,000).
The cash paid into the annuity is to fund periodic payments to the boy.
He is to receive lump sums of $30,000 (€26,900) each year for four years after he turns 18. The cash is intended for his college tuition.
The boy will also receive a monthly income of $4,000 (€3,600) for five years after turning 25.
The annuity will also be used to generate further lump sum payments of $50,000 (€44,800) when he turns 18 and $586,753 (€526,000) when he turns 30.
The total value of the benefits from the fund by 2040 will be almost €1m (€896,000).
A second case, involving claims a 10-year-old girl suffered severe burns to the upper thigh and lower torso during an Aer Lingus flight from Dublin to Orlando last July, has also been settled.
Her parents sued for damages of €75,000 (€62,700), but the terms of the settlement have yet to be revealed.