Bloomberg reports that China is lifting its month-long ban on airlines taking deliveries of new Boeing jets, amid a trade deal that ultimately cut tariffs for both nations.
“Officials in Beijing have started to tell domestic carriers and government agencies this week that deliveries of US-made aircraft can resume,” and that “Discretion has been given for airlines to organize delivery on their own timing and terms.”
The ban was put in place in mid-April. Soon after, a handful of new Boeing jets began flying back to the U.S. from China. Bloomberg reports that it’s unclear how soon Chinese carriers can get these jets returned, as well as the rest of the planes they need.
I talked last month about how Boeing had begun to discuss shifting its deliveries intended for Chinese airlines to other customers. Boeing CEO Kelly Ortberg came out pretty clearly, saying that “We’re going to be pretty pragmatic with what we do here. For those airplanes that haven’t been built yet, we’ll be looking to maybe redirect those to other customers.”
For Boeing, the lifting of this delivery ban is ultimately the better outcome.
In the case that Boeing did have to look for new customers, the demand would’ve been there for these planes. There’s a global shortage of airplanes, and the manufacturer has an incredibly long backlog of deliveries. However, it still would’ve been more costly for Boeing to have to reconfigure dozens of aircraft originally intended for Chinese airlines to comply with other laws and regulations, and the cabin needs of each new customer. Getting planes delivered with minimal disruption helps them move efficiently and reach their goal (and FAA cap) of 38 Boeing 737 Max deliveries a month.
All in all, this is good news for Boeing, with its approximately 50 aircraft scheduled to be delivered to China this year.
Uncertainty, however, does remain. The current trade deal between the U.S. and China is good for 90 days, and we could very well see future delivery disruptions should the tariff war not be resolved during this timespan. Boeing will continue to be in the middle of trade disputes throughout the world, as it increasingly has been over the past decade.
Featured image by Tada Images, Shutterstock.
