Boeing’s Future Success Depends on What China Decides on the 737 Max
Boeing has China on its mind as the geopolitical gamesmanship between the world's two largest economies — China and the U.S. — could upset its plans to recover from the 737 Max grounding and position itself for its post-pandemic future.
The Chicago-based airframer aims to increase the Max production rate from the current 16 per month to 31 per month early next year, but this rate increase depends on China re-certifying the aircraft's return to service. China's aviation regulator, the CAAC, remains the biggest holdout in re-certifying the aircraft, which was grounded for almost two years in the wake of two fatal accidents traced back to a flawed flight-control system.
China's delay is the main impediment to the production-rate increase occurring, CEO David Calhoun told analysts during the company's second-quarter earnings call on Wednesday. The company's suppliers are ready for the ramp up but also are prepared should Boeing need to trim its ambitions. "If we get to the end of the year … we do have to consider real actions with respect to what the future rate ramp looks like," he said.
Chinese airlines now have about 100 Max aircraft on the ground awaiting re-certification. Calhoun believes the country will re-certify the type by the end of the year and in advance of the 2022 Beijing Winter Olympics, when the country's airlines will need the capa