So much for the sentiment that PRC is going to be tough on Boeing after the latest weapon sales to Taiwan. It seems Boeing is using threat of re-marketing 737 max earmarked for China as good leverage.
China is about to finish the process for re-introducing the Boeing 737 MAX after more than three years' suspension. China's aviation regulator and Boeing have held a meeting, media reports said on Tuesday.
The meeting, which was held on September 14, was to review the improved aircraft training plans for the 737 series and it is expected the Civil Aviation Administration of China (CAAC) will release the second version of the review report when the questions raised at the meeting are resolved, CAAC Journal reported.
The newspaper said the move highlights that the CAAC's resumption of the introduction of the 737 MAX aircraft will soon be complete.
One day after the meeting on September 15, Reuters reported that Boeing will begin to remarket some 737 MAX jets earmarked for Chinese customers, citing the company's top executives.
Chief Executive Dave Calhoun and Chief Financial Officer Brian West discussed the need to remarket some of the planes at separate events.
"We have deferred decisions on those planes for a long time. We can't defer that decision forever. So we will begin to remarket some of those airplanes," West said at a Morgan Stanley conference, according to Reuters.
Boeing said in July that it had about 290 undelivered airplanes and about half were designated for Chinese customers.
Bloomberg reported that Boeing has about $5 billion in cash tied up in the 140 or so Max planes destined for China.
Regarding the remarketing, Boeing China told the Global Times on Friday that demand in other markets around the world is very strong, and amid the background of current supply chain constraints, their existing inventory provides a flexibility that allows for adjusting production and reallocating existing inventory to a plan that reduces delivery risk.
This practice allows delivery of aircraft to other customers, while ensuring delivery of aircraft to customers in China when the time is right, Boeing China said.
Qi Qi, a market watcher, told the Global Times that supply chain problems are a superficial reason behind the remarketing, and the main reason is that the 737 MAX has not yet returned to service in China.
"There are no technical obstacles to returning back to China, but the market's interest in Boeing is still relatively weak," he warned.
China suspended commercial flights of the Boeing 737 MAX since March 2019 after two fatal crashes. The CAAC has not yet approved the return of the 737 MAX.
This year marks Boeing's 50th anniversary in China. An article posted on the WeChat account of Boeing China on August 17 said that preparations have been made for the resumption of deliveries of the 737 MAX. Boeing is trying to gain as much single-aisle market share as possible for the 737 MAX and aims to deliver them from its Zhoushan plant, the first 737 completion plant in China.
