China Says 'Yes' To Boeing — 737 Max Back In Business Amidst US Scrutiny

In a significant development, China has reconfirmed that Boeing Co (NYSE:BA) has the green light to recommence deliveries of its 737 MAX 8 aircraft to Chinese customers, ending a two-year import suspension.

What Happened: As per Reuters, when asked about the China Southern Airlines delivery, Chinese foreign ministry spokesman Wang Wenbin reiterated that Boeing has received the approval to deliver 737 MAX 8 to China.

“On Dec. 8, 2023, the Chinese department in charge completed the design approval of the Boeing 737 MAX 8 in accordance with China’s civil aviation regulations, the aircraft is ready for delivery,” Wenbin said.

Boeing delivered its first 737 MAX to a Chinese airline on Wednesday, March 2019. The 737 MAX 8, registered to China Southern Airlines (NYSE:ZNH), is currently grounded in Hawaii on its way from the U.S.

China’s approval comes at a crucial time for Boeing, which has been grappling with the aftermath of a mid-air cabin panel blowout on a 737 MAX 9 jet operated by Alaska Airlines. This incident led to the Federal Aviation Administration (FAA) restricting Boeing from expanding production of its best-selling narrowbody planes.

Despite the lifting of safety bans, new deliveries had been on hold due to escalating tensions between Washington and Beijing on various fronts, including technology and national security.

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Why It Matters: The FAA’s decision to halt Boeing’s 737 MAX production expansion, following the quality control issues and the subsequent grounding of the Max 9 planes, has had a significant impact on the company’s operations. This move by China to resume 737 MAX 8 deliveries could potentially alleviate some of the pressure on Boeing.

China’s civil aviation authorities granted Boeing permission to restart 737 MAX 8 deliveries to local clients in December 2023. This decision marks the end of a halt on the U.S. aircraft manufacturer’s most lucrative planes, which was imposed after the first delivery in 2019.

However, the recent incident involving a 737 MAX 9 jet has sparked a safety probe, with U.S. lawmakers urging Boeing’s CEO to prioritize safety over profits. The resumption of deliveries in China could be seen as a positive development for Boeing, but it remains to be seen how this will affect the ongoing scrutiny and the broader trade relations between the U.S. and China.

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