Boeing will make dozens of 737 MAX aircraft built for Chinese buyers available to other customers because of the prolonged delay in gaining China’s clearance to deliver the jets. The OEM lists 290 of its top-selling passenger jet in inventory and waiting for delivery, an estimated120 of which have been ordered by Chinese carriers.
Boeing has not indicated how many of the complete aircraft may be available to other buyers.
CFO Brian West recently addressed the decision to reallocate completed 737 MAX jets, telling an investors’ conference, “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.”
Although the 737 MAX program was grounded for 20 months during 2019-2020, during the investigation into and repairs to address the causes of two fatal crashes, Boeing continued to build new aircraft to address a significant volume of orders.
Starting with the Federal Aviation Administration in December 2020, the world’s regulatory agencies have recertified the 737 MAX’s air-worthiness. The Civil Aviation Administration of China recertified the 737 MAX in December 2021, and various operators in that country have resumed service with the 737 MAX aircraft already in their fleets.
However, apparently due to a prolonged trade dispute between the U.S. and China, Boeing has not been cleared to deliver the new aircraft to Chinese carriers that ordered them.
For its part, Boeing has explained the delayed deliveries as an effect of Covid-19 quarantines and related restrictions.
Although China has been one of the strongest markets for the twin-engine, mid-range passenger aircraft, the large number of completed aircraft in inventory is significant problem for Boeing, which cannot report the revenue expected for those orders. Meanwhile, Boeing continues to have a significant backlog of orders – and yet cannot begin a planned production-rate increase from 31 to 38 jets/month, because of the inventory overload as well as a shortage of turbofan engines and other critical components due to supply-chain gaps.