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May 23, 2024

Boeing’s Deliveries to China Stall Amid Regulatory Scrutiny of Cockpit Batteries

Boeing, the American aerospace giant, faces a hiccup in its aircraft deliveries to China as regulatory scrutiny over cockpit batteries causes delays. According to a source familiar with the matter, recent weeks have seen a pause in Boeing’s deliveries to China due to a meticulous review by the Civil Aviation Administration of China (CAAC) concerning the batteries powering the cockpit voice recorder.

Acknowledging the situation, Boeing issued a statement affirming its collaboration with Chinese customers to navigate through the timing challenges posed by the CAAC’s review. The regulatory examination primarily focuses on the batteries integrated within the 25-hour cockpit voice recorder, a critical component ensuring flight data recording and safety protocols.

In its year-end 2023 filing, Boeing disclosed an inventory of approximately 140 737 MAX 8 aircraft, out of which 85 were designated for Chinese customers. Despite delivering 22 aircraft to China in the initial months of 2024, Boeing has encountered a standstill in recent weeks, refraining from dispatching new planes to Chinese clientele amidst the ongoing review.

Brian West, Boeing’s Chief Financial Officer, expressed optimism to investors regarding the anticipated delivery schedule, aiming to fulfill most of the inventoried airplanes by year-end. However, the duration and impact of the CAAC’s review on Boeing’s delivery targets remain uncertain.

While the Federal Aviation Administration (FAA) has certified the 25-hour Cockpit Voice Recorder (CVR) system, gaining approval from European regulators, the ultimate decision rests with the CAAC regarding its acceptance in China. Boeing maintains deference to the regulatory authorities, signaling cooperation while awaiting further developments.

Amidst persisting trade tensions between the United States and China, characterized by escalating tariffs, Boeing’s aircraft deliveries serve as a crucial point of observation. The resumption of 737 MAX jet deliveries to Chinese airlines in January marked a pivotal moment, ending a prolonged import freeze following safety concerns arising from fatal accidents in 2018 and 2019.

Notably, recent legislative mandates stipulate the inclusion of 25-hour cockpit voice recorders in all future planes, reflecting an industry-wide commitment to enhanced safety standards.

The geopolitical landscape further complicates Boeing’s operations, with China’s Commerce Ministry announcing restrictions on certain US firms, including Boeing’s Defense, Space & Security segment. Previous disputes over aircraft purchases underscore the broader economic tensions impacting Boeing’s market access in China.

As Boeing navigates through regulatory hurdles and geopolitical headwinds, the aviation industry closely monitors the implications on global supply chains and market dynamics. The resolution of regulatory reviews and trade disputes will significantly shape Boeing’s trajectory in one of the world’s largest aviation markets, affecting stakeholders across the aerospace sector.

Jhumpa Lahiri

Jhumpa Lahiri

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