Since the aircraft has not been granted the go-ahead to fly after two tragic crashes by China’s aviation authorities, the Boeing 737 Max planes that were manufactured for Chinese airlines cannot be delivered; company executives claim that the aircraft will find other customers. Boeing believes that the measure will contribute to reducing the inventory of Max planes that have accumulated while the aircraft have been grounded internationally. The move may cause tension between China, which was formerly Boeing’s largest market for the Max, and the aircraft maker.
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According to company executives, Arlington, Virginia-based Boeing had 290 undeliverable 737s in its inventory as of June 30 with over half of them going to China. When China’s aviation authority made a significant move toward allowing airlines to continue using the Max last December, Boeing’s expectations were elevated. Chinese airlines conducted flying testing in February. However, the Chinese Civil Aviation Administration has not yet taken the necessary actions to permit the restart of Max flights and deliveries, which Boeing officials attribute to COVID-19 lockdowns.
The business was losing patience in the meanwhile. “We’ve put off making judgments about those planes for a very long time. We can’t put off making that choice forever “Brian West, the chief financial officer of Boeing, said on Thursday. Therefore, we will start reselling some of those aircraft that were previously reserved for our Chinese customers.
Boeing “did not make the choice lightly” since China “is a key market,” according to West at a Morgan Stanley investor conference. Although airlines frequently receive significant discounts, he expressed optimism that Boeing can find new customers for the aircraft, which sell for $100 million and over.
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The Max is still awaiting certification to fly in China, which is the last significant market. Boeing’s modifications to the aircraft were authorised by the U.S. Federal Aviation Administration in late 2020, and authorities in Europe, Canada, and Brazil have since done the same. When China’s three major airlines purchased roughly 300 Airbus aircraft in July, Boeing’s dependence on the Chinese market was made clear.