© Reuters. FILE PHOTO: The Boeing logo is seen on a screen, at the New York Stock Exchange (NYSE) in New York, U.S., August 7, 2019. REUTERS/Brendan McDermid
By Sophie Yu and Jamie Freed
BEIJING/SYDNEY (Reuters) – A Boeing (NYSE:) Co 737 MAX made its first passenger flight in China in nearly four years on Friday, marking a major milestone in the US planemaker’s attempt to rebuild its business in the second largest aviation in the world. market.
China Southern Airlines Co Ltd’s domestic flight from Guangzhou to Zhengzhou departed at 12:45 pm (0445 GMT) using a MAX aircraft, according to flight tracking website FlightRadar24.
The best-selling Boeing model was grounded in March 2019 after fatal crashes in Indonesia and Ethiopia, but returned to service around the world beginning in late 2020 after modifications to the aircraft and pilot training.
China is the latest major market to resume MAX flights amid ongoing trade tensions with the United States, with the return coming as demand for domestic travel picks up after it abandoned zero-COVID policies.
Foreign airlines began flying the MAX to China in October 2022, in a sign that the first country to land the model after the crashes was relaxing its policies.
China Southern had scheduled a return to commercial service for the 737 MAX in October 2022, but did not use it on planned flights.
Boeing and China Southern did not immediately respond to a request for comment.
MAIN CHINESE CLIENT
Chinese airlines had 97 of the narrow-body jets before grounding, according to Cirium data in 2019. China Southern is the model’s biggest Chinese customer, with 50 orders, of which 34 have already been delivered.
Boeing said in October that it had another 138 planes made for Chinese carriers in the United States awaiting delivery. It said it had begun to remarket the planes to other airlines as there were no concrete signs Chinese airlines would accept the planes any time soon.
China’s domestic aviation market was depressed in 2022 due to sporadic lockdowns designed to quell COVID-19, but demand is rising now that COVID controls have been lifted.
Citi analyst Jason Gursky said the return of the MAX was Boeing’s first step toward normalizing its operations in China and could open the door for delivery of new planes.
“Boeing suggested in its November 2022 investor day that its long-term financial goals do not include delivery of new aircraft to China,” it said in a note to clients on Wednesday, adding that a change in that situation would make it their targets were significantly less risky.
Boeing has lagged far behind Airbus SE (OTC:) in deliveries to the world’s largest aircraft market, largely due to the MAX grounding.
In 2022, Boeing has delivered eight planes to China, while Airbus has delivered more than 100.
Boeing has received virtually no new orders from China since 2017, while state airlines placed a mega-order for nearly 300 Airbus jets last year.
Both western manufacturers also face a new market challenge due to the Chinese-made C919 narrow-body aircraft that was certified last year, although ramping up production will take time.
