After more than four years of halted deliveries following two fatal crashes, Boeing may finally resume deliveries of its 737 MAX aircraft to Chinese airlines. China’s aviation regulator, the Civil Aviation Administration of China (CAAC), has released a report that Boeing considers a crucial milestone for restarting these deliveries.
A $15 Billion Inventory Awaits
Boeing has an inventory of over 130 completed MAX jets for Chinese customers, with a total value exceeding $15 billion at list prices. These aircraft have been grounded since March 2019 due to two deadly crashes in Ethiopia and Indonesia. As the CAAC published the second revision of its 737 evaluation report, incorporating updates to 737 MAX training and technical information, Boeing sees this as the “final technical requirement” for resuming deliveries.
However, U.S.-China trade tensions could still hinder progress. While Boeing CEO Dave Calhoun described the report as “encouraging progress” and “an important step,” he added that “our customers will determine the timing of when they are ready to take delivery of their airplane.”
Chinese Airlines Show Positive Intentions
Despite the halted deliveries, Chinese airlines have been signaling positive intentions. Hainan Airlines recently announced its plan to take delivery of 14 MAX planes from lessors between 2023 and 2026, along with 47 Airbus A320neo family jets. This marks the first time a Chinese carrier has revealed plans to add MAXs to its fleet beyond those ordered before the grounding in 2019.
China Eastern and China Southern also expressed their intentions to resume accepting deliveries of MAX jets this year, without providing further details.
Ongoing Challenges and Geopolitical Tensions
As all Chinese MAX operators have resumed flight operations and 45 out of 95 MAX jets are back in service, the outlook for MAX deliveries in China remains uncertain. JPMorgan analyst Seth Seifman says it’s still “hard to say” when China will begin accepting MAX deliveries, calling the whole process “extremely opaque.”
The CAAC report, however, provides an “incremental” reason for optimism regarding MAX momentum in China, according to Myles Walton of Wolfe Research. As geopolitical tensions and opaque processes persist, the aviation industry will keep a close eye on developments surrounding the 737 MAX aircraft in China.
Source: Reuters
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