By Valerie Insinna
(Reuters) -Boeing is set to deliver its first 737 MAX to a Chinese airline since March 2019 on Wednesday, flight data shows, ending a four-year freeze on imports of the U.S. planemaker’s most profitable product in a respite for severely strained trade relations between the world’s two largest economies.
For Boeing, the delivery symbolizes the re-opening of doors to China, one of the fastest-growing aerospace markets, which Boeing projects will compose 20% of the world’s aircraft demand through 2042. It represents a vote of confidence for the planemaker during a difficult period for Boeing following a Jan. 5 mid-air cabin blowout during a full flight.
Chinese imports of the MAX have been suspended since it was grounded worldwide in 2019 following two fatal crashes in 2018 and 2019. Safety bans have been lifted with existing MAX already flying inside China, but new deliveries had remained on hold.
Boeing has faced increased scrutiny following the Jan. 5 mid-air incident on an Alaska Airlines flight. Nobody was seriously injured, but the FAA grounded 171 MAX 9s after the incident.
A 737 MAX 8 for China Southern Airlines is scheduled to depart from Seattle Boeing field in Washington state at 9 a.m. Pacific Time (1200 ET) for Honolulu, flight data from FlightRadar 24 shows, before its final destination in China.
Boeing declined to comment.
The MAX handover comes after Boeing made its first direct delivery of a 787 Dreamliner to a Chinese customer since 2019.
However, the trajectory of future deliveries remains uncertain, and it’s unclear whether the event represents a real reset of Boeing’s relationship with China or a temporary political concession.
The Alaska Airlines incident has kicked up a storm of scrutiny around the aircraft maker, one of two major suppliers to the industry along with Airbus.
Analysts say a full rollout of the MAX line-up is crucial to help Boeing stabilize its roughly 40% share against Airbus and generate sufficient cash.
Boeing said it would hold a “quality stand down” on Thursday at the Seattle-area location where it makes 737 aircraft, pausing production and delivery operations for a day.
Boeing shares rose 0.9% on Wednesday.
GEOPOLITICAL TENSIONS
China was the first nation to ground the 737 MAX in March 2019 and has been slow to resume its relationship with Boeing amid growing trade and geopolitical tensions between Washington and Beijing.
The restart of Chinese 737 MAX passenger flights in January 2023 provided some positive momentum.
Business relationships between the U.S. and China further thawed after U.S. Commerce Secretary Gina Raimondo’s visit to China in August and talks between U.S. President Joe Biden and Chinese President Xi Jinping in November. Biden raised the topic of resuming Boeing plane deliveries, Raimondo told Reuters in December.
However, orders of Boeing jets remain largely stalled. Hong Kong’s Greater Bay Airlines is the sole Chinese carrier to buy Boeing airplanes this year, announcing a deal for 15 737 MAX jets in March. Between 2018 and 2022, Chinese customers booked orders for only 25 Boeing planes, with sales dominated by cargo aircraft, according to Boeing data.
(Reporting By Valerie Insinna)
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