Boeing delivers first 737 MAX to Chinese airline after four year hiatus

Boeing is set to deliver its first 737 MAX to a Chinese airline since March 2019, signalling a potential easing of trade tensions between the U.S. and China.

In a significant development, Boeing is set to deliver its first 737 MAX to a Chinese airline since March 2019, according to flight data. This marks the end of a four-year hiatus on imports of Boeing’s most lucrative product, offering a potential respite to strained trade relations between the United States and China.

The delivery carries substantial symbolic weight for Boeing, signifying a reopening of doors to China, one of the fastest-growing aerospace markets globally. Boeing projects that China will account for 20% of the world’s aircraft demand by 2042. Despite recent challenges, including a mid-air cabin blowout incident on an Alaska Airlines flight, the resumption of 737 MAX deliveries to China underscores a vote of confidence for the American aerospace giant.

The 737 MAX faced a global grounding in 2019 following two fatal crashes in 2018 and 2019. While safety bans have been lifted, Chinese imports of the MAX remained suspended, making this delivery a pivotal moment. The 737 MAX 8, destined for China Southern Airlines, is scheduled to depart from Seattle Boeing field in Washington state before making its way to China via Honolulu.

The recent mid-air incident involving a 737 MAX during an Alaska Airlines flight has intensified scrutiny on Boeing. The Federal Aviation Administration (FAA) subsequently grounded 171 MAX 9s, adding to the challenges faced by the aircraft manufacturer.

Boeing’s relationship with China, a crucial market, has been marred by geopolitical tensions and trade disputes. The trajectory of future deliveries remains uncertain, and it is unclear whether this event represents a genuine reset in Boeing’s relationship with China or a temporary political concession. Despite the uncertainties, Boeing’s shares rose by 0.9% following this positive development. Analysts emphasize that a full rollout of the 737 MAX lineup is crucial for Boeing to stabilize its market share against rival Airbus and generate the necessary cash flow.

China’s decision to resume the 737 MAX passenger flights in January 2023 provided initial positive momentum. However, the broader business relationships between the U.S. and China, especially regarding Boeing orders, have yet to fully rebound. The recent delivery is a step forward, but ongoing geopolitical and trade dynamics will continue to influence the future trajectory of Boeing’s engagements with China.