Boeing to Re-Sell 737 MAX Aircraft Ordered by Chinese Airlines

Photo: Boeing 737 MAX 10 makes its first flight. Photo Credit: Boeing
Photo: Boeing 737 MAX 10 makes its first flight. Photo Credit: Boeing

LONDON – Aircraft manufacturer Boeing has stated that they will find new buyers for some of the B737 MAX aircraft which were allocated for delivery to Chinese airlines.

On Thursday this week, officials from the manufacturer announced the move, basing their decision on the fact that the Chinese aviation regulator, the Civil Aviation Administration of China, is yet to clear the aircraft type to fly.

China is effectively the last major global aviation sector yet to grant the 737 MAX aircraft flying status, following two major accidents involving the type.

The commerce vs diplomacy balance

The delay in the grant of re-certification for flight operations by the Chinese regulator has effectively put Boeing in a position of being ‘between a rock and a hard place’ – the manufacturer now needs to offset commercial pressures with the risk of adding to tensions with China.

China was previously the largest market for the Boeing 737 MAX family aircraft, and therefore it is recognised as an important market sector for the aircraft manufacturer.

The aircraft manufacturer has been forced to weigh this against the commercial aspect of an increasing inventory of undelivered aircraft, part of which is a legacy of the mass groundings and general inactivity during the extended pandemic period.

It is understood that Boeing have had almost 300 undelivered 737 MAX aircraft on their inventory as at mid-2022, with almost half of that number pre-allocated to Chinese airlines.

It is uncertain at this stage just how many of the China pre-allocation aircraft are to be sold to alternative buyers.

Chinese progress on 737 MAX recertification

The Chinese aviation regulator appeared to be making progress toward the recertification of type earlier this year, with the running of a formal flight-testing program.

However, this momentum was lost as the year progressed, and the final steps towards the approval are yet to be taken. The regulator cites the round of COVID-19 lockdowns are the cause of the delay.

Boeing statement

Having to weight their decision, Boeing clearly cannot delay further and the tone of their statement this week made that clear.

Referring to the matter on Thursday, Boeing Chief Financial Officer Brian West stated: “We have deferred decisions on those planes for a long time. We can’t defer that decision forever, so we will begin to re-market some of those airplanes that were otherwise earmarked for our Chinese customers.”

Speaking during an investor conference, Mr West noted that China remained “an important market” and the decision to reallocate aircraft was not taken lightly by Boeing.

Mr West felt confident that the manufacturer would be able to find other buyers for the aircraft.

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