Boeing delivers 737 Max aircraft to China, ending five-year drought

By Julie Johnsson and Danny Lee

Boeing Co. handed over a 737 Max aircraft to a Chinese airline for the first time since the best-seller was grounded in early 2019, in a boost to the US planemaker as it works to shore up support for the beleaguered model.
 

A China Southern Airlines Co. Max took off from Boeing Field in Seattle Wednesday at 11:55 a.m. local time bound for Honolulu, according to tracking service FlightRadar24. The flight is the first of several legs across the Pacific, marking a major milestone nearly five years after Beijing banned the aircraft from flying in the wake of fatal crashes in Indonesia and Ethiopia.

The breakthrough hands Boeing some much-needed good news as it struggles to recover from a crisis that erupted on Jan. 5, when a fuselage section blew off in midair from a 737 Max 9 operated by Alaska Airlines. US regulators have grounded 171 of the variant, and customers from United Airlines Holdings Inc. to Alaska Air Group Inc. and Ryanair Holdings Plc have criticized Boeing’s recent string of quality lapses.

Shares of Boeing advanced to session highs, up as much as 2.9% intraday, after Bloomberg reported on the delivery flight. Spirit AeroSystems Holdings Inc., the supplier that makes most of the plane’s airframe, gained as much as 9.1%.

China Southern is taking delivery of a Max 8, by far the top-selling member of the 737 family. Resuming exports to China should provide a boost to Boeing’s cash, while helping the company whittle down its stockpile of hundreds of already built aircraft lingering from a global grounding nearly five years ago and the Covid-19 pandemic that followed. The planemaker holds around 75 of the workhorse jets earmarked for China, executives have said.

The handoff comes as Boeing steps up 737 deliveries after weeks of unrelenting scrutiny and damaging headlines. Not counting China Southern’s new jet, Boeing had delivered 14 of its 737 family aircraft, including 11 Max, along with a KC-46 tanker so far this month, Scott Deuschle of Deutsche Bank said in a report to clients before Wednesday’s flight. All of the Max deliveries so far this year have gone to operators outside the US, he noted.

Handovers to China were set to start late last year. However, preparations were put on hold after the planemaker and Federal Aviation Administration instructed Max operators to inspect the aircraft for loose rudder bolts. 

China signed off on Juenyao Airlines Co.’s newest 787 Dreamliner delivery on Dec. 21, the first passenger jet handed over directly from Boeing to a Chinese carrier since November 2019. That signaled Max deliveries could be next. 

Boeing declined to comment. China Southern didn’t respond to a request for comment outside of regular business hours.