US-China Conflict? Boeing "Delay in Aircraft Delivery to Chinese Customers"

Only 22 out of 85 Delivered
"Payment Upon Delivery Completion"

Delivery of aircraft to China is being delayed as Chinese regulatory authorities investigate certain parts of aircraft manufactured by the U.S. company Boeing.

On the 22nd (local time), according to major foreign media, Boeing stated in a press release that the Civil Aviation Administration of China (CAAC) has completed its investigation into the batteries and that Boeing is currently in discussions with Chinese customs authorities regarding the timing of aircraft deliveries.

[Image source=AP Yonhap News]

As of the end of last year, Boeing held 140 units of the 737 Max 8 model in inventory. Among these, 85 units were scheduled to be delivered to Chinese customers. Boeing delivered 22 of these to China by the end of April but has been unable to deliver the remaining units due to parts inspections and other reasons.

Earlier, Brian West, Boeing’s Chief Financial Officer (CFO), told investors in April that "most of the aircraft in inventory will be delivered by the end of the year." Investors are closely watching Boeing’s aircraft deliveries because Boeing can receive most of the payment only after delivering the aircraft to customers.

The delay in aircraft delivery to China appears on the surface to be due to CAAC conducting its own review of the 25-hour cockpit voice recorder. Following strengthened U.S. aviation safety laws, all aircraft cockpits are required to be equipped with a 25-hour recording device. Boeing has obtained certification from the U.S. Federal Aviation Administration (FAA) and European regulatory authorities.

However, given that the Chinese government recently imposed sanctions on Boeing Defense, Space & Security (BDS) for selling weapons to Taiwan, some speculate that the delay in aircraft delivery may have been influenced by this issue.

Since 2017, amid escalating U.S.-China tensions, Chinese airlines have halted new orders for Boeing 737 Max models. Additionally, following consecutive crashes of Boeing 737 Max aircraft in 2018 and 2019, Chinese authorities banned the operation of this model within the country for a period of time.

Then, with the U.S.-China summit held in San Francisco last November, relations between the two countries began to improve, and Chinese authorities approved the delivery of Boeing aircraft within China last March.