Boeing is taking a conservative view on the Chinese market but is encouraged by the gradual return to service of 737 Max jets in the country.
Speaking during a first-quarter briefing, chief executive Dave Calhoun said all Max operators in China have brought at least part of their fleet back into operation.
“[Our] focus has been, and is, on supporting customers’ return to service,” he says.
Forty-five of the 95 Max aircraft in China are “back in the sky”, adds Calhoun, and he highlights the Civil Aviation Administration of China’s release of a 737 evaluation report.
“[That] is an important step in delivery of aircraft currently in Boeing’s possession,” he says. “We’ll follow the lead of our customers.”
Boeing’s guidance and expectations on such matters as production rates and deliveries remain conservative, and not predicated on the Chinese market. Some 60% of the 225 737s held in inventory are destined for Chinese customers.
Calhoun stresses: “We’re working very hard to regain China…it takes risk out of the delivery of the finished good inventory, simply because there’s less work to do in getting the aircraft to their originally-intended customer.”
But he adds that production rates would not be particularly affected, because Boeing’s plans for 737 output to rise to 50 aircraft per month in 2025-26 are “constrained by supply – they’re not demand rates”.
He says the Chinese market has come back “as robustly as anyone might have imagined”, with domestic travel already matching pre-pandemic levels.
“They need airplanes,” he states. “Our customers, in my view, are going to need more airplanes in the relatively near- to medium-term – this is a pretty easy way for them to satisfy that need.
“No geopolitical discussion is actually required here. We have orders on the books, we have airplanes on the tarmac, so this [CAAC step] is just a nod from the Chinese government that they’d like to take delivery of their airplanes.”
Calhoun reiterates that the airframer’s guidance “assumes best things don’t happen”, but adds: “If they do, we’ll welcome that news.”
