Boeing Prepares to Reignite Supply Chain with China Deliveries

As reported by CNBC, Boeing is gearing up to restart its operations with China this june, following a meaningful pause initiated by the Chinese government that halted deliveries of Boeing aircraft to local airlines.

During a press briefing on May 29, Boeing’s CEO Kelly Ortberg announced that China has signaled its readiness to resume accepting deliveries for the first time since April. This comes after an order from China on April 15 that prohibited all deliveries of Boeing jets and instructed domestic firms to cease purchasing U.S. aircraft components. At that point, there were plans for the delivery of ten 737 Max planes to Chinese carriers.

Ortberg also mentioned ambitions to ramp up production of the 737 Max model, aiming for a monthly output of 42 planes soon and potentially reaching 47 by year-end.However, this increase hinges on receiving approval from the Federal Aviation Administration (FAA), which currently restricts production levels to just 38 units per month due to safety concerns stemming from incidents involving door plug failures in January 2024 and broader issues related to safety culture at Boeing.

Additionally, on May 23, Boeing struck a preliminary deal with the U.S. Department of Justice aimed at sidestepping criminal charges linked to two tragic crashes involving the 737 Max in late 2018 and early 2019. Under this agreement, Boeing will pay over $1.1 billion while committing itself to enhancing its quality assurance and safety protocols moving forward.