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China was the first nation to ground the Boeing 737 MAX in 2019 after two deadly crashes in five months. Photo: Reuters

Boeing 737 MAX’s return to China remains up in the air as regulatory, political hurdles persist

  • Boeing said it expected the 737 MAX to be approved everywhere by the end of June, but China’s aviation authorities do ‘not trust traditional certification authorities’
  • People familiar with the discussions say regulatory and political obstacles mean any resolution is still months away

Trade power tensions, regulatory hurdles and attempts by the West to counter Chinese competition are delaying a return of the 737 MAX in China, frustrating US-based Boeing as a potential rival shows its growing influence.

Six months after the West lifted an almost two-year flight ban on the MAX, there is no clear end in sight for the crisis surrounding Boeing’s fastest-selling jet in China – the first nation to ground it in 2019 after two deadly crashes in five months.

The company had hoped for China to approve the MAX to return to the sky by the end of last year; in January, Boeing said it expected the MAX to be approved by regulators everywhere by the end of this month. Now, with help from the Biden administration, Boeing is stepping up efforts to convince China that the plane is safe and to reset its most strategic partnership as airlines start to recover from the coronavirus pandemic.

But people familiar with the discussions say regulatory and political obstacles mean any resolution is still months away. For Boeing CEO David Calhoun, that means seeing profits and market share slip to European rival Airbus.

“I do know that if it goes on for too long, I pay a price,” he said at a Bernstein conference this month. “I pay a price because they [China] are the biggest part of the growth of the industry in the world.”

Because of the China uncertainty, Boeing is not confident it can raise production beyond the level of 31 MAX planes per month that it expects to hit by early 2022, Calhoun said.

The company has been all but shut out of new orders in the world’s biggest aircraft market since 2017, which contributed to its decision to cut production of its long-haul 787 model.

China hopes to compete against Western planemakers, including with its C919 – a potential rival to the MAX – and other narrowbodies such as the Airbus A320. Its manufacturer, the state-owned Commercial Aircraft Corporation of China is aiming for local certification of the C919 by year’s end, and is ultimately seeking Western certification.

That potential competition has prompted the United States and Europe to call a truce in a 17-year aircraft trade war so they can focus on challenging Chinese subsidies.

Group of 7 leaders last week scolded China over a range of issues and demanded a thorough probe into the origin of the coronavirus, angering Beijing.
Any improvement in the political backdrop to the MAX decision seems unlikely before the Communist Party’s 100th anniversary on July 1, sources and analysts say.

“The 100th anniversary of the founding of the party, the 20th Party Congress next year, the [2022 Winter] Olympics – all of those push China to be less cooperative,” said Scott Kennedy, a senior adviser at Center for Strategic and International Studies.

The MAX grounding – after crashes that killed 346 people – has been worst crisis in Boeing’s history. Design flaws led to multiple investigations, damaged its reputation worldwide and left it short of cash needed to cope with the coronavirus crisis.

Yet, a year ago, the prospects of China returning the MAX to service on a timeline similar to that of the United States and Europe seemed good.

But politics, practical problems such as visa and quarantine issues, and the Chinese aviation regulator’s intense scrutiny have gradually sapped US hopes of a quick solution, industry sources say.

Last year, engineers from Seattle visited China to answer the Civil Aviation Administration of China’s (CAAC) technical queries, one of the people said.

Once it was clear that the CAAC’s timeline lagged that of other regulators, Boeing suggested that China send representatives to Seattle to observe test flights, two people said, but the CAAC declined to do so as the pandemic raged in the United States.

Discussions shifted to having Boeing’s engineers and pilots travel to Beijing for test flights, but six months later that has not happened, the first person said.

Boeing said it continued to work closely with the CAAC and other regulators to return the MAX to service worldwide, the company but declined to respond to specific questions from Reuters.

The CAAC declined to comment about the timeline for approval or the considerations for granting it. But CAAC chief Feng Zhenglin raised concerns late last year about Boeing’s pilot training and aftermarket services in a small group meeting, a third source familiar with the matter said. The source, like others in this article, declined to be identified because of the sensitivity of the matter.

The US Federal Aviation Administration was also cautious about the MAX’s return to service and slapped down efforts by Boeing to speed up the process; Europe’s aviation regulator delayed approvals by months.

The CAAC, however, is known in the industry as the most conservative of the world’s major aviation regulators. China has not had a deadly commercial air crash in more than a decade. The CAAC was also the first regulator to ground the MAX. It has since issued three requirements for the return to service of the MAX in China: certified design changes, sufficient pilot training, and definitive findings from the crash investigations.

The CAAC … have put on their big boy pants. [They’re saying] ‘We do not trust traditional certification authorities any more’
Source at Western aerospace supplier

Beijing has big long-term regulatory ambitions, according to a State Council blueprint. It aims for China to become a global aviation power by 2050, giving the regulator greater international influence.

The CAAC’s most recent jet aircraft certification was with the domestically manufactured ARJ21 regional jet, whose production is ramping up after five years in service. It has not been certified by any Western regulator.

In the past, the Chinese regulator would have simply ticked certification boxes under bilateral agreements, a source at a Western aerospace supplier said. But now, as Beijing pins its aviation hopes on the C919, it is asking for detailed and sometimes proprietary data, analyses and presentations.

“The CAAC … have put on their big boy pants,” the source said. “Now what they’re doing in the industry is saying, ‘We do not trust traditional certification authorities any more. We want to learn ourselves what you guys have been doing for the past 50, 60, 70 years.’”

This article appeared in the South China Morning Post print edition as: Boeing 737 MAX’s return to China still up in the air amid political obstacles