Boeing Eyes 737 Max’s China Return But Political Bargaining At Play

Chinese officials are reportedly open to test flights for the Boeing 737 Max, a key step needed before the jet can return to service in one of the world’s biggest aviation markets. Boeing stock rose.


The details for recertification test flights are still being decided, sources told Bloomberg, which also said Chinese authorities are in talks over 737 Max simulator sessions.

Meanwhile, Boeing is ready to send 35 pilots and engineers to China at the end of the month to help regulators, according to the report.

Still, it could still be several months until China approves the 737 Max to re-enter service.

The U.S. FAA approved the jet’s return to service on Nov. 18, and the European Union and Canadian regulators followed in early 2021.

However, Chinese regulators have withheld their OK over concerns about the plane’s design change and pilot training.

The real reason could be less about safety concerns and more political. China is also trying to push its own homegrown narrowbody plane.

The C919 is due to start commercial service later this year and relies on U.S. technology, Bloomberg noted, adding that it also would need U.S. regulators’ approval before it can be exported.

China is a major aviation market as more people join the middle class and key for Boeing stock. In November, the company estimated that China needs 8,600 new aircraft through 2039, a 7% increase from its 2019 outlook.

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Boeing Stock

Shares rose 1.2% to 239.56 on the stock market today. Boeing stock is consolidating with a 278.67 entry point, according to MarketSmith chart analysis. Top 737 Max supplier Spirit AeroSystems (SPR) rose 1.5% Friday, and engine supplier General Electric (GE) added 1.6%.

Problems with the 737 Max’s Maneuvering Characteristics Augmentation System automated flight-control software contributed to two crashes in 2018 and 2019 that killed 346 people and sparked a global grounding.

Since the 737 Max has returned to service, carriers in the U.S. and Europe have already shown their confidence with orders for the narrowbody jet, lifting Boeing stock.

United Airlines (UAL) announced June 29 that it would buy 200 737 Max jets. Southwest Airlines (LUV), the top 737 customer,  announced on June 8 that it would buy 34 737 Max jets for delivery in 2022. The carrier now has 234 737 Max aircraft on order in total and says it could need up to 500 new aircraft as it expands U.S. service.

Ireland’s Ryanair (RYAAY), Alaskan Airlines (ALK), and Dubai Aerospace Enterprise have also ordered more 737 Max jets.

Boeing will report its full June and second-quarter order and delivery tally on Tuesday.

European rival Airbus (EADSY) said Friday that it delivered 297 aircraft in the first half of the year, putting it on course to meet its 2021 targets.

Airbus’ U.S.-listed shares were unchanged at 32.26. The stock is technically in buy range from a 31.40 entry, but a continued 50-day bounce above its 21-day line would offer investors another entry point.

Follow Gillian Rich on Twitter for aviation news and more.


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