China unlikely to certify Boeing 737 MAX to fly again any time soon, analysts say
- US-China relations are unlikely to improve in near future, which makes a speedy return to a vital market less likely
- The jet was grounded in 2019 following two fatal crashes and the aviation regulator is likely to be cautious about allowing it to fly again
“Some large companies are certainly eager to maintain [their business in] the Chinese market or even expand the Chinese market, but at present, these enterprises can only play a rather small role in US politics,” said Shi Yinyong, a professor of international relations at Renmin University and an adviser to the State Council, the country’s cabinet.
“Boeing’s trade with China will not significantly expand further, and it will be a blessing for them to be able to maintain the status quo.”
Boeing’s chief executive Dave Calhoun said in a call with analysts last week that the company expects China to lift its grounding order on the 737 MAX in the second half of 2021.
He also urged the US government to “reinstate” its trade relationship with China in the aerospace sector, saying the country will represent 25 per cent of the global growth in the aviation industry over the next decade.
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“We’re now at a stage where the focus is on the economic recovery here in the United States on the part of the administration, as well as now getting their feet a little firmer on the ground with respect to China relationships. It’s time for us to just point out the economic implications of trade with China in the aerospace industry and commercial aviation specifically. You know, they’re significant,” Calhoun said.
The state-backed Global Times reported in April that Xiamen Airlines was modifying its Boeing 737 MAX jets in preparation for a return to service in line with new technical guidelines from Boeing.
However, the report also said the airline is still waiting for the green light from the Civil Aviation Administration of China, which has said its major safety concerns had to be “properly addressed” before it can be cleared to fly again.
“Boeing’s share price may be showing strength but the company faces critical challenges. Its recovery is contingent on the Max flying safely again without any more technical issues. Boeing also needs to come up with a new plane to match Airbus’s latest offering, the A321XLR,” said Shukor Yusof, founder of aviation consultant Endau Analytics.
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Boeing last week confirmed that it had halted 737 MAX deliveries after the US Federal Aviation Administration issued a new airworthiness directive requiring a fix before the jets could fly again.
“Boeing is not solely dependent on the 737 MAX but, along with the 787, it is one of the key pieces in its product portfolios and a major cash generator,” said John Strickland, director of the aviation consultancy JLS Consulting.
“There is a real consciousness about safety in China. This will drive willingness to recertify [the 737 MAX to fly] but it certainly could be blurred with wider political sensitivities.”
Shi said safety concerns would outweigh any political factors, adding: “As for the resumption of the 737 MAX, China is the country that cares most about the safety of civil aviation in the world, and if the world is not fully confident in accepting the 737 MAX, China will probably never approve the resumption of these flights.”
Observers believe there is little prospect of an immediate improvement in the relationship between the two countries, which could help Boeing to grow its business in one of the world’s fastest growing civil aviation markets.
Katherine Tai, the US Trade Representative, said last Wednesday that the US government was examining China’s performance in complying with the phase one trade deal signed in January 2020.
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But she also said her office had not started its review of US trade policy towards China or whether the US would consider reducing its import tariffs on Chinese goods.
“Everything hinges on whether there will be a rapprochement, which doesn’t look forthcoming any time soon. I suspect China will do whatever it needs to do, and not be cowed by the US,” Yusof said.
Shi said even in a “best scenario” in which the two countries get back to the negotiation table, the US is likely to keep some tariffs on Chinese goods to use that as leverage to ensure Beijing remains committed to buying American goods and make structural changes to its economy.
“The US is also decoupling hi-tech from China, which will relatively reduce the volume of trade between China and the US, too,” Shi said. “In short, there will be no dramatic improvements between China and the US in any area.”
