Boeing’s CEO is confident 737 deliveries in China to resume soon as airlines seen locking in capacity at a time of surging air travel
- China’s airlines can’t afford to sit on the sidelines and watch other carriers lock in capacity when Boeing and Airbus SE’s factories can’t keep up with booming sales
- Air travel is surging after China ended its Covid-era lockdowns, and the nation’s carriers need workhorse jets like the 737 MAX to meet burgeoning demand
Boeing is optimistic it will soon restart long-stalled exports of its 737 MAX jets to China, especially with President Xi Jinping slated to visit the US later this year, the planemaker’s top executive said Tuesday.
The reason is simple: China’s airlines can’t afford to sit on the sidelines and watch other carriers – like Ireland’s Ryanair Holdings – lock in capacity at a time when Boeing and Airbus SE’s factories can’t keep up with booming sales.
Air travel is surging now that China has ended its Covid-era lockdowns, and the nation’s carriers need workhorse jets like the 737 MAX to meet burgeoning demand, Boeing Chief Executive Officer Dave Calhoun said in an interview moments after unveiling a US$40 billion order from Ryanair.
“The market is coming back, it’s exploding. So am I reasonably confident? Yes,” Calhoun said of China.
China was among the first nations to ground the 737 MAX following two fatal crashes – and among the last to reverse the step. Its airlines haven’t taken delivery of Boeing’s cash cow jets since early 2019 as the pandemic crushed air travel – and political tensions simmered with the US. But Calhoun hinted the impasse could have repercussions for China’s airlines at a time when Boeing and Airbus are running low on delivery slots for their bestselling jets.
Boeing’s not inclined to “move out our existing customers” to provide China’s airlines with advantageous delivery positions, Calhoun said. “We’re talking about orders out in the early 2030s.”
Does Airbus have the edge over Boeing in China’s aviation market?
Airbus is also sold out on its bestselling models until at least 2028, the European planemaker has said.
The constrained availability of new jets prodded Ryanair to get serious about buying Boeing’s largest 737 MAX model after years of on-again, off-again talks, CEO Michael O’Leary said in an interview. Calhoun called the head of the Irish discount airline in January, and the two leaders “worked out the bones of an order in the space of about an hour,” he said. The purchase announced earlier Tuesday is the largest in the carrier’s history.
Ryanair has committed to take 300 jets from Boeing between 2027 and 2033, and risked an even longer wait if it hadn’t acted. The budget carrier would’ve started Max 10 deliveries earlier if that had been an option to serve the demand for travel in a post-Covid world, O’Leary said.
“What Covid has taught everybody is that actually travel is less of a luxury and more of a fundamental kind of freedom,” O’Leary said. “People have a much greater appreciation of travel and tourism post-Covid than they had pre-Covid.”
An outspoken critic of Boeing’s production delays in the past, O’Leary praised Boeing on Tuesday for making progress in tackling supply-chain glitches. The repair for the latest 737 structural defect, unearthed by a supplier in recent weeks, will require Boeing to remove the vertical fin from completed aircraft, Calhoun said.
“Fundamentally they’ve done a heroic job of: one, identifying the problem; two, fixing it,” O’Leary said. And Boeing has done this “with a very mild, modest slippage in deliveries.”
