Boeing 737 Max jets sold to Chinese airlines looking for new owners; Here’s WHY

The Boeing 737 Max jets that were built for Chinese airlines cannot be delivered since the plane has not been given the all-clear to fly following two catastrophic crashes by China's aviation regulator; according to company officials, it will find other buyers. Boeing anticipates that the action will help reduce the inventory of undeliverable Max jets that were amassed while the aircraft were grounded globally. China, which was formerly Boeing's biggest market for the Max, and the aircraft manufacturer could become tenser as a result of the decision. 

Arlington, Va.-based Boeing had 290 undelivered 737s in inventory as of June 30, with about half of them earmarked for China, company officials said. Boeing's hopes were raised last December when China's aviation regulator took a major step toward letting airlines resume using the Max. In February, Chinese airlines ran flight tests. But the Civil Aviation Administration of China has not taken the final steps to allow Max flights and deliveries to resume, which Boeing officials blame on COVID-19 lockdowns.

Meanwhile, the company was running out of patience. "We have deferred decisions on those planes for a long time. We can't defer that decision forever, "Boeing Chief Financial Officer Brian West said Thursday. "So we will begin to re-market some of those airplanes that were otherwise earmarked for our Chinese customers."

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China "is an important market," and Boeing did not make the decision lightly, West said during a Morgan Stanley investor conference. But he expressed confidence that Boeing can find new buyers for the planes, which list at $100 million and up, although airlines routinely get deep discounts.

China is the last major market where the Max is still awaiting approval to fly. The U.S. Federal Aviation Administration approved changes Boeing made to the plane in late 2020, and regulators in Europe, Canada, and Brazil have followed suit. The importance of the Chinese market to Boeing was underscored in July when China's three largest airlines ordered nearly 300 planes from its European rival Airbus.

With inputs PTI