Pontifications: Signs point to China OK soon for Boeing deliveries, orders

By Scott Hamilton

Aug. 29, 2022, © Leeham News: The Chinese government appears on a path toward authorizing Boeing to resume deliveries to airlines by or early in the fourth quarter, China watchers tell LNA.

China hasn’t placed new orders for Boeing aircraft, with few exceptions, since then-President Donald Trump initiated a trade war with China shortly after taking office in 2017.

Nor has China taken delivery of more than single-digit numbers since 2019, following the grounding of the 737 MAX in March that year. China’s regulator, CAAC, was the first to ground the domestic MAX fleet following the second accident of the type in March 2019, five months after the first accident.

China was the last major regulator to recertify the MAX, in December 2021, following the FAA’s recertification in November 2020. But CAAC has not authorized deliveries. It appeared on the cusp of doing so when last May a China Eastern Airlines 737-800 nose-dived from cruising altitude into the ground, killing all aboard. CAAC ordered China Eastern and its affiliated airlines to ground all 737-800s, a move widely believed to be unwarranted given the circumstances of the crash that tentatively pointed to a cockpit-controlled dive. Later investigation largely confirmed this, though no accident report has been released yet.

Because of the crash, CAAC withheld authorization for Boeing to resume deliveries of the MAX. Geopolitical considerations also are believed to have played a role as tensions between the Washington and Beijing continued over the unresolved trade war, China’s straddling sides in the Russian-Ukraine War, and visits by members of the US Congress visited Taiwan. China regards Taiwan as a renegade province and objects to political visits by other countries.

Signs that authorization may come soon

China watchers point LNA to several events that suggest government approval for Boeing to resume deliveries isn’t far off.

  • Despite the Chinese government’s refusal to approve the delivery of Boeing aircraft to airlines, deliveries to lessors are allowed. However, none of these aircraft were delivered to Chinese airlines.

There have been limited order cancellations by lessors when during the grounding and pandemic some Chinese airlines notified them that they no longer wanted the MAX. The lessors canceled some orders when, during the same period, replacement lessees couldn’t be found. These airplanes reverted to Boeing. Aircraft were resold and, in some cases, interiors were removed and installed on new production aircraft. These airplanes were then reconfigured into the new customer’s interior layout.

  • Xiamen, China Southern and Hainan airlines each ferried one of their MAXes which were in operation when the CAAC grounded the fleet in March 2019, to implement the improvements required by the FAA. Each was ferried shortly after CAAC’s recertification and has remained parked since the ferries.
  • Boeing’s China president, Sherry Carbary, said on Boeing’s China WeChat page that the Zhoushan 737 Completion and Delivery Center is “ready for the resumption of the 737 MAX delivery in China”. Boeing is cautious about saying things that get ahead of the government. In December, Boeing celebrates 50 years of doing business in China.
  • The next G20 Summit is November 15-16 in Indonesia. China President Xi Jinping plans to attend, his first foreign outing since the COVID pandemic began in March 2020.
  • The Chinese New Year comes in January.
787 Deliveries

China’s international traffic is a fraction of pre-pandemic levels. But there are “good signs” emerging that international travel will be opened soon, perhaps beginning with Xi’s trip to Indonesia for the G20 Summit. “He hasn’t traveled at all since the start of COVID,” the China watcher said. He added that if Xi meets with US President Joe Biden outside the G20 structure, this could signal a softening in US-China tensions.

Deliveries of the 787 to all customers were suspended by Boeing in October 2020 due to production flaws. Only a couple of 787s were delivered to customers since then. The Federal Aviation Administration authorized Boeing to resume deliveries this month. Deliveries of 767 and 777 Classic freighters continued. But China received only three 777Fs since 2017. This may change before the end of the year as well.

Fleet renewal

China historically required early retirement of aircraft, usually after 12 years of service, with a few exceptions, such as conversions to freighters.

One China aviation expert says that this policy stemmed in part from CAAC’s concern about the quality of aircraft maintenance when the rule was adopted decades ago. Since then, joint ventures with foreign MRO centers mitigated the subpar maintenance.

Boeing pointed to geopolitical tensions between the US and China after the big, 292 aircraft order between Airbus and China was announced on July 1. If Biden and Xi reduce tensions in November, Boeing could benefit from new orders in the following months.

China has been slow to authorize a return to service. “Part of it is political. Part of it was China wanted to see the MAX in service with other airlines for a period of time to make sure there are no issues. There was an element of extra delay for the China Eastern crash. In reality, that shouldn’t have affected it, but it did. I’m hopeful that by the end of the year, we’ll get results,” said one China watcher.

Another consideration: load factors domestically remain low due to the zero COVID policies imposed by Beijing. But this China watcher said the load factors should begin improving by the end of the third quarter and the start of the fourth quarter.

162 Comments on “Pontifications: Signs point to China OK soon for Boeing deliveries, orders

    • Good luck getting those planes delivered in a realistic timeframe.

      • Delays also currently apply to deliveries from BA and AB — and those delays appear to be getting more entrenched.
        Why would the situation in the Russian aerospace industry be any worse? They have all the raw materials they need, they have a domestic engine, and they have a very nice airplane that is continuing to be “sterilized” of western parts.

        • @Bryce How are they replacing parts that need modern computer chips affected by the sanctions? Russia has no chip factories I’m aware of. And so far chinese companies are shying away from making themselves a target for US sanctions and thus are exciting the russian market.

          • Recent events have shown us that there’s a large block of powerful countries that don’t give a hoot about western sanctions — including BRICS and almost the entire Middle East.
            There are back doors everywhere — and plenty of quiet transactions that go through them.

      • Stlealth 66:

        Old song to the tune of the 12th of Never and that is a long long time!

        “Good luck getting those planes delivered in a realistic timeframe.”

  1. “But this China watcher said the load factors should begin improving by the end of the third quarter and the start of the fourth quarter.”

    This sounds very optimistic.
    The 3rd/4th quarter coincides with the expected fall/winter resurgence of “a certain respiratory disease”.
    Moreover, China is in the throes of a real estate crisis, added to an economic slowdown.

  2. ‘Despite the Chinese government’s refusal to approve the delivery of Boeing aircraft to airlines, deliveries to lessors are allowed. However, none of these aircraft were delivered to Chinese airlines.’

    While I’ll refrain from offering legal advice, I would surmise that since these lessors have business with airlines in other jurisdictions – in other words, countries who’s regulators have recertified the Max for service, said lessors perhaps open themselves up to legal judgements by not taking possession of the aircraft and allowing their customers to operate them.

    Besides, if an airline has a deal with a lessor to operate an aircraft, if the lessor does not follow through on the terms, the airline will just go elsewhere for service, no? You only hurt yourself (your own leasing companies) by not allowing them to make money off of other countries airlines.

    Chinese airlines can make do with older models, until their aircraft are brought online. Lessors have no other options. If the airlines want to operate a certain type, they have to lease them that aircraft.

    • It would be interesting to have a list of non-Chinese airlines that lease aircraft from Chinese lessors. Chinese lessors now rival Irish lessors in size.

    • Frank:

      You can add in the oddity of the grounding and the ability to cancel deliveries if two years late.

      But say that you have delivery dates not met, but two deliveries in Jan 2023 which Boeing does meet.

      And can Boeing pull those deliveries out of the already built pool ?

      • I guess the point I am trying to make, is that if a Chinese lessor does not execute the contract between BA and the airline, another lessor will step in and take the business.

        Why cut off your nose to spite your face?

        Right here on the CALC (China Aircraft Leasing Group) page:

        https://www.calc.com.hk/?route=fleet_portfolio&portfolio_id=15

        You’ll find the Max

        Because if they don’t do it, others will.

        • Frank:

          I don’t follow the lessors that much in regards to who they lease to (mostly makes no never mind)

          Chinese lessors I think tend to in China, how much extra China, I don’t know.

          I assume they would want world wide lease ops but are they there and would then the MAX be a natural as it would not be an internal China decision.

          • Finnair/United/many others lease from CDB Aviation/BOC Aviation etc IIRC

            BOC Aviation, I believe, has an international customer base, its predecessor is Singapore Aircraft Leasing Enterprise.

            P.S. CALC, straightly speaking, is not a true “Chinese” lessor though 40% is held by a Chinese bank.

      • -> But say that you have delivery dates not met, but two deliveries in Jan 2023 which Boeing does meet.

        Says who??? 🙄

    • @Frank

      Yup. Sometimes I feel like I was looking at funhouse mirrors or close to Steve Jobs’ RDF, is he back??

    • BA is removing engines from Chinese aircraft in inventory — does that sound like a company that expects to resume China deliveries soon?

      • The shifting of engines from built aircraft in the parking lot to support the production line is not unique to parked Chineese aircraft. In actuality, many western customers have ceased to exist and their aircraft are also candidates for donor engines. Lets not oversimplify the situation as a number of sticky points make it quite complex. Currently, the aircraft on order from Chinese lessors are still under contract and are being built as ordered. The Chineese government isnt allowing the MAX to be operated domestically yet for a number of reasons which include political realitys. They are using their governmental approval process to erect an additional barrier between the lessors/buyers and BA. Therin lies the answer to the question of how BA can report that its buildins at or very near its 31.5 rate yet shows deliverys less than that amount…… BA is contracted to build aircraft for China and they continue to do so……. The situation is quite complex and not being helped by being on allocation for engines from the manufacturer. Airbus is in the same boat to a certain degree for different reasons…. Lets try to stay away from gross oversimplications of very complex supply chain realities as they end up skewing the picture of whats really happening….

        • One should also avoid unnecessary “gross over-complication” of issues. In that regard, it’s still perfectly valid to say:
          “BA is removing engines from Chinese aircraft in inventory — does that sound like a company that expects to resume China deliveries soon?”

          • “BA is removing engines from Chinese aircraft in inventory — does that sound like a company that expects to resume China deliveries soon?”

            Seems like a valid and obvious first question, to me..

          • Bryce.
            I have kept the complications to a minimum so most folks can follow it. I haven’t gotten into the different types of engines we are talking about as each has a different selection matrix for shuffling….. You have Prime manufacturer direct sale engines, Prime manufacturer Power by the Hour engines, Prime manufacturer leases, 3rd party MRO Power by the Hour as well as sales and straight leases. Lets add in that customers with engines or engine delivery positions may also be brokering engines they control and have coming back to the manufacturers for “considerations”. Airline spares are also marketable now…… Obviously the situation changes daily if not hourly. Im just showing you this as an effort to show you I went to lengths to keep it understandable for the readers here…….

          • @pnwgeek
            You’re taking a simple issue and dressing it up in layers of unnecessary padding.

            My point requires no consideration of the *processes* or *reasons* behind engine removal: my point purely concerns the *frames that are being subjected to engine removal*.

            You don’t remove engines from a frame that you expect to be delivering soon.

        • OK Pnwgeek – I’ll bite;

          It sounds like desperation. And for a few reasons;

          1) Those engines are 3-4 years old? If I’m buying a new aircraft, I want a brand new aircraft – otherwise you better come to the table, ask nicely and give me some goodies.

          2) If BA is contractually obligated, as you said – to keep producing Chinese aircraft, giving away those engines would require involving the buyers of those aircraft, the engine owners (power by the hour? owned outright?), leasing companies (if they’re leased) and most likely a host of other involved parties. It’s not as easy as just taking them off and saying “OK, here’s your plane!”, is it? It’s like messing around with BFE, no? To a degree? Why jump through all those hoops, unless you are stuck?

          3) All of this looks like it will someday be headed to a court of law, down the road. Boeing v. Chinese Airlines et al. Wouldn’t it be better to keep all of those aircraft together, and in one piece, rather than breaking them apart and essentially parting them out? For legal reasons.

          4) As discussed, this could be the very first step in the process to dumping the Chinese orders (with all due respect to Scott and his opinion on warming relations) and BA getting what they can for the parts that are left.

          Add it all together and it sounds like a little bit of a garage sale/part out process, in which BA will not recover the money it put into it. Indeed, this is only going to cost them more.

          The grounding, pandemic, trade war and invasion of Ukraine couldn’t have come at a worse time for BA.

          • Point three seems like a potentially important one. Self-imposed murkiness in the product and its ownership tends to not work out well,
            I think.

          • Those engines have been pickled and well preserved. Good as new.

          • Frank:

            Leeham had a fire walled article on that but some of what Scott wrote and other references clearly said that the aircraft until final payment is made belongs to Boeing and they can do what they want with it.

            So if Boeing sees China as not taking those up then no reason not to use the engines and other parts as needed. As engines are in arrears delivery wise it makes sense. Boeing can juggle the deliveries to China if they are accepted again.

            I am taking a hands off approach on what China will do, I agree with Scott on indicators but your best interests vs internal politics are not the same thing.

            If China needs the aircraft then suddenly things change or if China is not getting the deals they did before from Airbus that can change it as well. No prediction on which side that falls. You can see the possibles but not which branch is taken.

          • Frank.
            This is very complex because BA in almost all cases, does not own the engines. They are positioned to assist the engine manufacturers/owners in moving engines as directed to get aircraft delivered. Im not sure why that smacks of desperation nor do I see why its going to end up in court. BA is making counterweights to allow them to continue to build 737s with munimal disruption due to the supply chain having engines on allocation…… As I said to Bryce, this is an very complex supply chain issue and there are quite a few moving parts many nonindustry types are skipping over through oversimplication. To your point of on wing performance being adversely affected by a long storage, there are intense discussions about that, but BA is an observer in that process as it neither builds owns or services the engines. Many of you guys are thinking BA owns everything in the parrkimg lot, they dont. All the BFE and SFE parts are the property of other folks. When we see news reports of aircraft interiors being removed from aircraft, it was because the owners of the interiors wanted it moved….. Its quite a complex time in the supply chain. With respect to Scotts statement that BA can do anything they want to undelivered aircraft, Im sure the unspoken part of that is that is that is that the engine owner ALSO benefits from engine reallocation, so his take is correct…… Engines will be moved when it is mutually benedicial to BA and the Rnfine owner to do so….. A delivery solves problems for all concerned…

          • Airlines ordered fresh veggie and got kimchi?? 😂

          • -> … the aircraft until final payment is made belongs to Boeing and they can do what they want with it.

            Really?? Scott wrote that? It’s clear those engines are not BA’s.

        • Pnwgeek:

          The impact of China is outsized as their orders are large and the recent Airbus order puts a sharp line in things right now.

          It is indeed complex for all the listed reasons as you noted.

          Its of interest because of the size of the China market but we of course will not know until something happens or continues not to and will never know what drove it whichever way it goes.

          • Agreed……
            OBTW…
            Did you see the news that Airbus slipped the delivery dates of the RCAF CC-295s from now until the 2025/2026 timeframe due to “unforseen technical isdues

          • Agreed……
            OBTW…
            Did you see the news that Airbus slipped the delivery dates of the RCAF CC-295s from now until the 2025/2026 timeframe due to “unforseen technical isdues

          • Ahem. The devil is in the details ….

            -> *All aircraft were expected to be delivered* by the end of 2022. However, *initial operating capability* is delayed until 2025/26.

          • ” … due to “unforseen technical isdues”

            -> In the fall of 2020, DND subsequently “re-baselined” the schedule, with a new IOC date of mid-2022. But software upgrades, ongoing testing, and complications created by Covid travel restrictions have forced the department to delay the Kingfisher operations until at least 2025.

        • I think it’s popular to oversimplify the current situation and/or blame political interference.
          @Bryce prev. posted CAAC has three conditions for the MAX to meet. It looks like it hasn’t fully met all three conditions.

          • Indeed, Pedro.
            Perhaps BA has quietly decided that it’s not going to meet condition #3 any time soon, and is acting accordingly.

  3. “But there are “good signs” emerging that international travel will be opened soon, perhaps beginning with Xi’s trip to Indonesia for the G20 Summit.”

    This is total wishful thinking. The Chinese border won’t certainly open before Xi has secured his 3rd term later in fall. And even then, it is hard to imagine that they just open up from one day to the other.

    While their economy is suffering, a quick opening would be catastrophic for the population. The local vaccines are not that effective. The experience of Hong Kong last winter lead to one of the highest fatality rates, despite Biontech vaccines and a +70% vaccination rate.

    Opening up will be painful, no matter how it is made. But it’s hard to believe it will be quick.

    • Matth:

      I think weighing into all this is China economy and what the impacts are that way as well as political fallout. And clearly, you can only close down so long and you still are going to have various Covid versions waiting to pounce.

      70% vaccination rate not only does not cut it, even with good vaccine and combo high infected rates and those vaccines the variants break through.

      I just tested positive, good vaccine shots and booster and careful to wear mask in public and not much of that, so far pretty much ok. Even with a BA1 to 5 booster, likely to wear down and still get it.

      ps: If you don’t hear from me in the future I am pushing up daisies.

      • My understanding is that talk of “Covid” is not permitted on this site. So why is this commenter allowed to go on and on about it,
        when others cannot even mention that single word ?

        • @Bill7: Because I don’t monitor every minute of every day and sometimes such comments slip through. But when I see a smart ass, I clamp down. You’re suspended for 30 days.

          Hamilton

          • Scott:

            I will also apologize. It seems relevant to China opening up but the details were not needed.

          • Thank you, I wish this on no one and its pretty mild overall.

            So far so good, cleared the congestion and feeling almost normal other than scratchy throat.

            hopefully not out of line to recommend the BA4/5 booster (US, not sure what other areas are doing). No idea how or where but I had not contacts with anyone who had it I knew of and minimal time and proximity to people in general.

      • > I just tested positive, good vaccine shots and booster and careful to wear mask in public and not much of that, so far pretty much ok. <

        So why get the grossly undertested, underscrutinized, and unsafe "vaccines",
        if they do not prevent infection with or transmission of the ultra-deadly™ Covid?

        • Bill7, I suggest that you don’t go down that road — it will only serve to incur The Wrath of Scott.
          Instead, let’s all just wish @TW good health, and get back to discussing BA’s woes in China.

        • Again thank you and I am feeling almost normal today. Not a clue how far into it I am, at least 5 days from what I can tell. Could be longer.

  4. -> He added that if Xi meets with US President Joe Biden outside the G20 structure, this could signal a softening in US-China tensions.

    Probably more likely talking past each other
    https://amp.dw.com/en/xi-warns-biden-against-playing-with-fire-over-taiwan/a-62627489

    Shrugged.

    There isn’t any hint of softening from recent actions, so good luck BA. Each day’s delay, BA is paying airlines/lessors compensation. *Time is not on its side!* Xi also can see what happens to Russia.

      • So – it kinda did in May 2022, but the Pelosi visit trashed all that, didn’t it?

        Day 468: May 3, 2022 – USTR signals it may lift trade tariffs on some Chinese goods

        Day 476: May 11, 2022 – Joe Biden says US may lift tariffs on Chinese goods to combat inflation.

        • Frank:

          And then things settle down and change again? Stay tuned!

          I won’t go into details to avoid a major political blowup discussion and my getting the old heave ho, but a lifetime of watching the world (call it 55 years) and its what someone decides not people. It all can change in a heartbeat if someone wants to be offended or someone decides they don’t regardless of how bad the offense was.

          • > its what someone decides not people. It all can change in a heartbeat if someone wants to be offended or someone decides they don’t regardless of how bad the offense was. <

            Oh. That clears things right on up.

            😉

  5. It was interesting to read that some Chinese lessors actually returned MAXes to Boeing.

  6. CNBC: Bank of America warned investors today that US airline bookings last week were down 24% compared to the same week last year. Too early to draw conclusions yet, but this may be a first indication of tempering consumer sentiment/spending. One can surmise that the situation in other countries — including China — will be similar.

    • Bryce:

      I am seeing data that says it was getting better then another drop due to lock-downs in China.

      So the factors are changing all the time and back to it can change from one day to the next.

      Depending on how much the political end plays in vs the China need, as long as China does not need MAX for capacity then it can use the political aspect.

    • What’s the classic definition of a recession? 🤔

      -> “For the first time since 2009, the U.S. gross domestic product was negative for two quarters in a row. After dropping 1.6% during the first quarter of 2022, the GDP fell another 0.9% in the second quarter, according to the Bureau of Economic Analysis.”

  7. Don’t forget another geopolitical issues…China Comac C919 and how the US was looking to stop key US subsystems and engines being shipped to China The C919 is in China national technology policy Somehow the US needs to proof they are not going to hold Comac hostage in the future

    Let’s get real on the situation…same engines on the 737. Comac C919 production capacity is only 4 a month. It will take decade…early 2030s to get to 12 a month…If the US plays nice and Boeing gets authorization to shipped stored 737 and a new order (last order 2017)

    • “…it will take decade…early 2030s to get to 12 a month”

      This is the Chinese that you’re talking about — they’re like a swarm of ants when there’s a job to be done. If/when the PD-14 engine comes online, C919 rates will probably climb a lot faster than they would at western OEMs.
      Look how quickly China built a cutting edge high-speed rail network.

      • Actually the C919 production line is very automated with Electroimpact wing final assembly tooling, Gemcor automated fuselage fastening systems and Brotje and AIT automated assembly tooling Comac only has the capacity of 4 shipsets a month for the C919 So the real question, do they duplicate the automation themselves or risk going to western suppliers which might be held up sanctions. As an example, the ARJ 21 second production line in Pudong (Shanghai) is a moving line with robotics done by a Chinese company. As for robotics, Kuka is owned by Chinese By the way Brotje Automation is owned by the Chinese

        • Very informative — thank you.
          I would imagine that the Chinese will keep the cards in their own hand, to the greatest extent possible: if they can build new lines themselves, they’ll probably do so.

        • David.
          People who underestimate Chinese manufacturing ability and expertise, do so at their own peril. The fact that they have an AESA radar equipped 5th generation fighter in production should scare people shitless. The Comac 919 is not the threat, their next airframe will be, and its not that far off in the chinese mind as they play a very long game very well……….

        • Those EU located entities, though Chinese owned would still be stopped up by (EU,US) sanctions.
          ( another foot shooting thing imho.)

          • The issue is not the ability of any country to ramp up mfg in other areas, its doing so in the Aviation field.

            Its just not happening in the Commercial Aircraft area.

            Nothing has been sanctioned on the C919, China is working on their own engine and will not buy the PD-14 which will be in short supply regardless and what few they make will go to the MC-21.

  8. I’m still hoping the prolific commenter who said “the MAX is allowed to fly in China” will fill us all in on the details.

  9. I am sure they will take the Maxes.
    First reason: Europe will certainly do something that will make the Chinese unhappy, it is not a question of if, only of when and what the reason the Chinese will find. Second, their last five year plan shows their ambition to be independent from the west in strategic technological areas, and having a large number of new airplanes in the country will provide for enough spares to part out in case of an embargo – I think they see that now in Russia, and will have observed how Iran has kept old planes in operation over decades. I think that the 12 year rule is a way (intentional or not) to hedge for an embargo, and cover the time until more railways are built, and domestic production of airliners gains momentum.

    • ‘Europe will certainly do something that will make the Chinese unhappy, ‘

      There’s making someone unhappy – then there is going the full Donnie.

      • Frank:

        Montie, keep telling yourself, Montie (Monty?)

        Another behind the scenes we will only see as orders or lack as to how China wants to balance out those aspects though Airbus will be happy to sell China at list prices!

  10. On the subject of removing engines from stored MAXs:

    BA also has many MAXs for United and Southwest sitting in inventory: may we assume that engines are also being removed from those aircraft so as to facilitate more current deliveries, e.g. to SIA, LOT or GOL?

    I somehow don’t think so.

    Interestingly, in the link below, if you click on frames now allocated to carriers such as United or Southwest, you’ll see that they were previously allocated to Chinese carriers, with the remark “NTU”(Not Taken Up). There are lots of such “re-allocations” — go ahead and click on them.

    It seems that BA is quietly giving up on China.

    https://www.planespotters.net/production-list/Boeing/737/737-MAX-8?sort=status&p=15

    • @Bryce

      As Pnwgeek pointed out – Boeing doesn’t own the engines.

      But here is the flip side to that coin: WHO is asking to have engines moved around?

      If it is the airlines, who want the aircraft in service and are approaching all the parties involved to make that happen?

      or

      Is it BA who is trying to plat tetris and move aircraft off the lot, by hook or by crook?

      If it is the airlines, BA can sit back and simply say “Look – you call who you need to call and if you can get authorization from whomever owns the engines, we’ll switch ’em up for you….for a fee”

      If it is Boeing trying to get aircraft moved, then they are doing the running around, they are doing the asking and they are footing the bill – so they can clear their stockpile.

      I guess this was the ‘umbrella’ point I was trying to make…

      • Frank,
        Regardless of who, why, where or how: one doesn’t take engines off of a frame that one expects to be delivering soon…unless one is desperate.

        BTW, what do you think of all those whitetails being allocated to UA and SW? Did you know that those airlines had (partly) purchased whitetails instead of new planes?

        • KeyPhrase: “…unless one is desperate.”

          My guess is that pulling delivery forward over a month or quarter border could speak for an engine swap. It really is “playing Tetris”.
          I’ve seen this in other places: even gutting the reference prototype.

          • Well, BA did only deliver 24 planes in July — 21 MAXs and 3 widebodies: so, yes, I think one can surmise that the company is desperate to make some compensatory deliveries. Unlike its main competitor, the company has to cough up $600M in debt interest per quarter. There have been four 787 deliveries this month (2x American, 1x Lufthansa, 1x KLM), so we’ll soon see if Jon Ostrower’s recent comment was correct (4 deliveries from inventory and then another long halt).

            Concurrently: once again, the “big three” airlines in China haven’t included the MAX in their near-term fleet planning (see FG link below)

        • ‘one doesn’t take engines off of a frame that one expects to be delivering soon’

          You’re right. Some of those aircraft have been undelivered since 2019, so I’m guessing they’re not moving any time soon.

          However, sending a team to take engines off an aircraft isn’t a big deal. They can probably get it done in one shift.

          Getting permission, reviewing contracts, negotiating rates, fixing terms and condition – is another story. Let me illustrate:

          I have a Max 8 sitting in the employee car park, that for whatever reason, I haven’t taken and won’t be taking, anytime soon. I’ve bought those Leap engines and own them.

          Boeing comes to me and says “Hey, Bryce has an airframe that he needs, can we have your engines to put on his aircraft?”

          So from my side:
          – Am I selling them? Am I getting them replaced in the future? Am I getting reimbursed? When are my new engines coming? Will they be here when/if I need them? There are a whole bunch of issues that my lawyers are looking over.

          From your side:
          – What condition are they in? Do you want slightly warmed over, sitting for a long time, refurbed engines for your ‘new’ jet? Who’s gonna maintain them? Who’s gonna fix them if they break?

          Who is going to guarantee everything?

          GE? Well, they didn’t do anything, they delivered the engines – it’s not their fault the engines are sitting there.

          Me? I’m waiting on my aircraft. I made my deposits and maybe I’m waiting on gov’t regulators to OK the aircraft into service.

          You, Bryce? You just want your aircraft and get it into service, right?

          Boeing? Well…kinda, yah.

          So I guess the onus is on BA if they want ME to give up the engines, YOU to accept less than new engines, GE to certify and maintain them (or some other entity)…otherwise everything can stay where it is and everyone gets their aircraft as contracted. Brand spanking new.

          • Don’t forget that the concept of “ownership” is complicated when financiers are involved: technically, the financier has “ownership” of a plane/engine, whereas BA only has “possession” thereof (for the plane) or “custody” thereof (for the engines). Any plans to move things around therefore require permission from the financiers involved — and from their insurers.
            A major mess of red tape…not a light undertaking.

          • Frank.
            Thats not the way it works.
            The engines are due on dock at Renton on a specific MDAY to support the Assy line. Boeing says I need engines or I hang blocks. The provisioning of the aircraft with engines is not BAs job. Im sure there is talk between BA and the engine guys, but the contracts are between the purchasers and the engine guys they use. Im sure BA will be as accomodating as they can to help get airplanes out the door, but they dont have a lot of leverage….. There is a possibility that BA is getting compensated for glider delays since the delivery delay is not of their making……

            Bryce…. nice to see you acknowledge how complicated it actually is…..

          • Frank
            I remember when we reallocated an engine off a UPS 67 9 days before it was to deliver. We plugged it on to an earlier 67 going to UPS after they fodded an engine on the C1 flight. Near term swaps happen, its never a good thing, but the people who say it lacks common sense just dont know what really gos on when deliverys need to be made

          • @Pnwgeek

            You’re talking about *hanging* engines on planes; Frank was talking about *removing* engines from planes.
            By definition, removal of something involves violation — and that always has consequences.

            I’m quite aware of how complicated it is — which reinforces all the more the idea that you don’t undertake the process for a frame that you think will soon be delivered.

            The example you give (UPS –> UPS) is obviously far less complicated than what’s currently going on (Customer A / country A –> Customer B / country B)

          • Bryce:

            Pnwgeek said they pulled an engine OFF one and put it on another.

            Kind of moot is it not? Its happening with the MAX

    • So, at least those various Congressional visits did yield a (small) positive result…

  11. Good synopsis by Scott. My take, I think the Chinese will not take the mad max, if they do it won’t be be until late 2023. The reasons have to do with the CAAC. I actually hope I’m wrong as Boeing has a huge investment in Zhoushan.

    Many comments on the engines. Some of it I agree with but mostly I don’t. Having worked at the delivery center for years Boeing can and will do what they need with musical engine’s. PNWgeek is right about BFE (buyer furnished equipment). SFE (supplier furnished equipment) is a different animal. You point Bryce about taking engines off a UAL or SWA jet is moot, these airlines are actively taking mad max deliveries and Boeing wouldn’t do that to them. Boeing does the same thing with other components, e.g. hydraulic pumps. In the end it’s all worked out in the delivery contract and ARL (aircraft readiness log).

    Good comments by all.

    • “You point Bryce about taking engines off a UAL or SWA jet is moot, these airlines are actively taking mad max deliveries”

      Exactly.
      Conversely: if engines are being removed from Chinese frames, it indicates that near-term delivery of those frames is currently not foreseen.

      • Bryce….
        You might consider that BA is plugging a short term engine delivery problem for its vendors… The engine owners are shuffling their engines as needed to deliver aircraft that would otherwise be gliders. This has far less to do with Chineese delivery prospects as it does with filling an immediate hole in the supply chain. If the Chineese started accepting deliverys tomorrow, there would still be engine shuffling occuring, ìt would just add more complexity to the decision making process..

        • You don’t remove an engine from a plane that you expect to deliver soon — it’s pure and simple logic.

          Alternatively: BA is *desperate* for cash, and is willing to cut out a kidney so as to earn some quick dollars.

          • That would be spot on.

            If China decides to fly the MAX, it still has the in country aircraft to get upgraded to the required spec, so that is a gap all by itself.

            The same would apply to any of the other MAX that are stored, if delivery is soon you leave the engines on it.

            And that does mesh with a at the end of the year (assuming that stands).

            China also will be monitoring its flights and aircraft needs and adjust any MAX flying or up take and adjust as they feel they need to.

  12. Bryce
    Your not getting it, and it shows through your comments regarding pure and simple logic. An engine reallocation to deliver an airplane today is the goal…. The schedule dislocations seem to be measured in weeks, possibly a couple months. Thats why BA is only making 20 to 30 counterweight sets……. You should really address the engine owners as they are in the drivers seat.

    • Pnwgeek:

      Reports are that Boeing can use the engines. Its a good point that engines are a separate buy but on a one engine aircraft (737 and 777CEO) does that change?

      I would think you would not swap an engine for less than a month, probably a days work as well as follow up testing.

  13. -> U.S. Army grounds Boeing-made Chinook helicopters fleet

    -> Boeing customer Ryanair says Max 10 aircraft won’t be certified by year-end deadline

    • The second point is no surprise.
      More interesting question: will the MAX-7 be certified before year end?

      • Bryce.
        Ryanair reported today that the -10 will not cert this year….

        The Chinook prob is an Engine Oring allowing fuel leaks and fires….

        • As regards Ryanair: why repeat what Pedro said? And why address it to me?

        • Pnwgeek:

          What was funny was OLeary says the cockpit change is a non issue and they will defer.

          He is well plugged into and highly influential in the US congress and maybe a good sized order would help tip the scales?

        • “..allowing..”

          and executed: they had fires.
          engine fires are undesirable. 🙂

    • “Max 10 aircraft won’t be certified by year-end deadline”

      All the delays and apparent dawdling seem to indicate that nothing is done that would indicate a concerted effort to recoup standing lost.

      Boeing management is waiting for “something”.
      EU and Airbus going belly up?
      GNW?

  14. On FlightGlobal this morning:

    “China’s ‘Big Three’ reticent on 737 Max’s return even as other deliveries continue”

    “China’s three largest carriers continue to omit the Boeing 737 Max narrowbody from their near-term fleet plans, casting a pall over Boeing’s plans to return the type to Mainland service.”

    https://www.flightglobal.com/fleets/chinas-big-three-reticent-on-737-maxs-return-even-as-other-deliveries-continue/150021.article

    *****

    And also on FG:

    “China’s continued ‘zero-Covid’ policy pushes ‘Big Three’ to record first-half losses”

    https://www.flightglobal.com/airlines/chinas-continued-zero-covid-policy-pushes-big-three-to-record-first-half-losses/150020.article

    • Wow. Interesting. It seems Reuters had an exaggerated headline and lede.
      -> “Boeing Co on Tuesday confirmed it has received an order for 787 Dreamliner aircraft from Taiwan’s China Airlines.
      ‘We are pleased that China Airlines has selected the 787 Dreamliner to modernize their world-class fleet and look forward to working with the airline to finalize the order,’ Boeing said in a statement.”

      OTOH some good news for the A220

      bloomberg.com
      Airbus May Win Order for About 50 A220s From India’s Jet Airways
      https://t.co/ZluTvFcnJk

      • Rather than the MAX-7 (once again).
        The writing is on the wall for the MAX-7 — how many think that BA will bother trying to certify the plane? Is it worth the trouble? The biggest customer (Southwest) is already nibbling on MAX-8s…

        • I wonder what’s the hold-up?? Shouldn’t it be “easy peasy”?

          Any possibility that BA can take engines off WN’s MAX 7 and move them to MAX 8??

          • “Any possibility that BA can take engines off WN’s MAX 7 and move them to MAX 8??”

            Good point — perhaps it’s already happening.

        • Previously Jet Airways had an order of over 200 MAX with BA before a new management took over.

    • Shocking Bryce..
      Like that’s never happened before when a carrier commits to a new order..
      So ..now do we chastise Malaysia Airlines for not firming their a330 neo order yet..
      Is that really worth even mentioning.!!

      • Amusing TC.
        There’s no harm in announcing an MOU or LOI — it happens all the time.
        But when a carrier announces an order — and the OEM says it isn’t aware of any such order — that’s certainly remarkable, isn’t it?

        In a sulk because BA stock has plummeted again today?
        Why not write to the editor of FlightGlobal — after all, that’s the media outlet that reported the story, isn’t it?

        • That’s fine Byrce .. … maybe you can write to Reuters . and ask why they said Boeing confirmed an order for the 787…
          Evidently , Boeing didn’t get your memo about not having a clue about the order…

          • And you can’t see how confirmation subsequently came in, after the initial lack thereof?
            Time flows in one direction…

  15. As a size note, my brother and his wife flew an Alaska Airlines -9 the other day.

    He was quite happy with handling and ops. He is a former pilot like myself except he did bush flying and was really really good at it (well you have to be or you bend your airplane up).

  16. Yet a further worsening of US-China relations now on the cards:

    “Nvidia said on Wednesday that it’s been told by the U.S. government to stop selling chips in China and Russia.”

    https://www.cnbc.com/2022/08/31/nvidia-stock-falls-after-us-government-restricts-chip-sales-to-china.html

    The irony is that SMIC in China is already capable of producing ICs at the cutting-edge 7nm node, without using EUV. It made the leap from 14nm to 7nm in just 2 years:

    https://www.techinsights.com/blog/smic-7nm-truly-7nm-technology-how-it-compares-tsmc-7nm

    So, the (backfiring) trade war is alive and kicking.

  17. -> 737 MAX customer in India struggles to pay “vendors and lessors, prompting some to deregister planes.”

    • In mid-2021:

      -> “Boeing CEO David Calhoun said during last Wednesday’s investor’s call that he expects *most of some 100 Dreamliners that were in inventory by late March* to be delivered **this year**.”
      https://airinsight.com/lufthansa-gets-a-dream-deal-for-787s/

      WN expected (i.e. were told) its MAX 7 to be delivered in 2021.
      -> Boeing had earlier indicated the plane would be certified by mid-2021.
      https://www.bloomberg.com/news/articles/2021-12-10/southwest-cites-frustration-over-737-max-certification-delays

      • Boeing has delivered 4 of the 787s so far. Two for American, one of KLM and one for Lufthansa.

        The Lufthansa was delivered out of Everett.

        So, that is 50 a year out of the pool! (not counting any the factory assembles with fix already done).

        • Jon Ostrower recently said — based on insider info — that inventory deliveries would come to a halt again after the first 4 frames…

        • Well, let’s see if Jon Ostroff is correct. He said 4 would be delivered in fairly short order, then there would be a delay.

          Meanwhile:

          “In the name of god, St Michael and St George, you are hereby knighted “787 Delivery Checker”. I give you the right to bear wrenches and the power to meet aerospace knowledge.”

          (slightly borrowed from one of my favorite movies)

          “Rise Sir TransWorld”

          https://www.youtube.com/watch?v=XAIeh0YarFs

          • Planespotters will do just fine 😏

            And Jon Ostrower will — no doubt — be monitoring closely, too.

            Far more interesting would be a “Knights of the Round Table” committee to monitor the coming certification/legislative circus with regard to the MAX-10. @Frank would make a good chairman (and treasurer) 😏

          • “Knights of the Round Table”

            Meet that Yankee at King Arthur’s Court.
            ( Mark Twain writing on projected imagery clashing 🙂

          • @Frank

            Remember that Scott wrote recently that BA wpuld not be able to clear its 787 inventory until 2024 the earliest? Rework takes time, and now everything has to go thru FAA before it’s approved for delivery.

        • @TW
          Some well-meant info for you: expect “brain fog” for a few weeks after you recover…it’s a very common symptom. I know many people who experienced it…typically lasting 2-6 weeks.

          • Bryce:

            Thank you, so far the brain seems to be working about as good as it normally does. I still have hopes for Boeing!

            This variant seems to be far less of a hammer than reported by others I know who got the Delta version.

            We have lots of good support to call on and for that I am most grateful.

        • “Boeing has delivered 4 of the 787s so far … So, that is 50 a year out of the pool! ”

          How many MAXs BA was able to push out and delivery in July? 24?? Is it fair to say BA can only deliver eh 24 x 12 (or 11-1/2) MAX this year?? 😂

          • You might be nearer the mark than you think.
            Spirit Aerosystems previously indicated that it would only build 315 MAX shipsets in 2022, which equates to an average of 26.25 per month. BA will thus have to rely on whitetails to get that number up…oh, but BA is taking engines off of whitetails, which kinda makes them undeliverable…

          • The 50 number was hyperbole.

            It was interesting to see the one out of Everett and how fast Everett cranks em out vs Charleston.

            We will get some idea of what the average looks to be by the end of the year. Averages are just that, you can have 1 this month and 6 the next month and its only valid over time and then you run out of built hulls.

  18. Pedro….
    Just thinking out loud….. BA says they are building at a 31.5 rate. They delivered 24
    last month That actually makes sense if you remember how many aircraft china ordered and that they are still being built as scheduled. The chinese aircraft cant deliver for whatever reasons they have….. I would expect something approximating this performance off the assy line augmented with parking lot clearance deliverys…… There isnt a lot of clarity here and the engine allocation situation makes it even sportier….

    • “BA says they are building at a 31.5 rate.”

      Remember the numbers Boeing provided for 777 production in context of the swapover from 77W to 77X:
      The rate was seen as high and B moderated the statement with “choice slots would be “blanks”.
      i.e. are 31.5 MAXes leaving the assembly line or is it only 25 or even less. ( You don’t have to store those blanks, what a relief 🙂

      • “…are 31.5 MAXes leaving the assembly line…”

        Doubtful, in view of the large inventory of 85-90 undelivered shipsets at Spirit Aerosystems: see above.

    • @Pnwgeek

      In early 2022, BA confirmed it was only able to produce MAX at 27/mth and targeted to produce at a rate of 31. At the time, two unidentified sources said it wouldn’t arrive before the second-half while a third one believed it could be earlier.

      I’m highly skeptical BA is (still) producing (31.5 – 24) over 7 MAX for Chinese customers *every month* in 2022. Inventory numbers don’t support your hypothesis.

      • Looking at planespotters current data, Starting with line number 8350 showing the Aug 22 delivery. The following line numbers return no data.
        8349, 8746, 8343, 8342, 8349-8330, 8328, 8327, 8325, 8324, and so on…..

        I have no explaination for the gaps in the plsnespotter data, however It does seem to support the past reporting that over 30% of 737s go to china, and we havent seen a mass cancelation from them. Anyhow, the whole accounting for deliveries doesnt matter to me as I exited my BA positions long as go…….

        • You’re confusing a *production* list with an *initial planning* list. The difference between the two is the *1198* MAX cancellations that occurred in 2019-2021 — the line numbers for hard cancellations get scrubbed, not re-allocated. In a few instances, the line number remains, but contains the label “not built”. Any Chinese frames that were or are in production have a line number and are clearly listed and named. No new Chinese frames have been built for months.

          • Bryce. Its apparent that you are complety clueless with the Boeing Firing Order and how it functions. Aircraft positions are reallocated with each revision of it. Your reliance on the planespotters incomplete list with all the data gaps shows me how much u dont understand….. But then I knew that……… If there had been a removal of chinese aircraft from the firing order as you are suggesting, Ostrower and many others with far more credibility than you or I, would have reported it loudly and early. They haven’t….. At Boeing, there is no such thing as an initial planning list, just the firing order incramentally revised as the skyline chart needs to be incramented into the MRP system….. There were no blanks loaded into the 737 line when I was there. Blanks happen for very specific and narrow reasons and it requires so much work in the MRP system that its quite onerous snd rccrrfingly rare. They didn’t even try to load blanks when the landslide killed 4 fuselages on the railroad tracks years ago….. Based on what you are passing as gospel, you’re seriously out of your depth here……. You can go away now and be the BS artist to the others here, but I am far beyond tired of reading your fiction. Good day sir.

          • Careful, PNWGeek: stepping into the personal insults forbidden by Reader Comment Rules.

            Hamilton

          • @Pnwgeek
            So, you additionally have general reading difficulties — not just specific to production lists. Who said anything about “removal of chinese aircraft from the firing order”? They’re all still there in the list — though you can’t seem to see them.

            Have a look — for example — at the orders list on Wikipedia for MAX cancellations (nobody said they were Chinese).

            Less posturing, more reading.

          • Careful, Bryce–stepping into the personal insults forbidden by Reader Comment Rules.

            Hamilton

          • @ Scott
            Thank you for those “circuit breaker” interventions 👍… and sorry to disrupt your day.

      • @ Pedro
        On top of the point you make, one also needs to consider that:
        – The “Big Three” carriers in China have removed the MAX from their fleet planning up to 2025;
        – Some previously Chinese frames are being reallocated to other customers, e.g. United.

        I think the 85-90 stored shipsets at Spirit Aerosystems are a clue: it looks like there aren’t enough engines to match the planned line rate, and BA has stated that it “doesn’t want to build gliders”.

        • CFM LEAP engine delivery
          2022 Q2: 226, Q1: 239
          2021 Q2: 211, Q1: 188

          The sanctions are working (as expected): shoots own foot again!

  19. Bryce

    Im sure a smart guy like you sees that there are many gaps in planespotters line numbers. Until you scrub it against the current rev of BAs firing order, their list requires answers as to its incompleteness. As I have said, the situation was very murky….
    Have a great day

    • There are zero gaps in the most recent pages on Planespotters — representing more than 100 frames worth of production; as indicated above, none of those frames is allocated to a Chinese carrier.

  20. Bryce,
    Looking at planespotters current data, Starting with line number 8350 showing the Aug 22 delivery. The following line numbers return no data.
    8349, 8746, 8343, 8342, 8349-8330, 8328, 8327, 8325, 8324, and so on…….

    Perhaps you might look again. The list appears to be quite incomplete

    • First : learn to reply in-line.
      Second: sort data according to LN rather than delivery date. The final 2 pages are all allocated to non-Chinese carriers — zero gaps. The last build for a Chinese carrier (third last page) was for Shenzhen.

    • Okay, so the conclusion is that you’re apparently unable to interpret production list data — in addition to being unable to reply in-line.

      Got it.

      • Bryce. Find the data for the line numbers I listed. When you sort by line number, those aircraft are not listed….. I didnt just pull this out of thin air. I went to the link you posted and parsed it. Explain the gaps….

  21. No Russia, No Problem

    Air Lease Corp seems to have resolved it’s Azimuth Airlines delivery problem. It was scheduled to deliver a half dozen A220’s to the carrier, with some in the production pipeline, when Russia decided to invade Ukraine.

    Fast forward a few months and the A220’s that were supposed to go to Azimuth are now starting to be delivered to ITA Airways of Italy. On Sep 2, ITA took delivery of it’s first A220 – line # 55168, which was first headed to Azimuth. Airframe #55176 is right behind it, currently going through flight testing in Mirabel at the time of this writing.

    ITA has orders for 22 of the former C-Series aircraft and looks to be eager to get the jet into service.

    • And Antonov 124, A340, Contract KC135. Basicly any 4 engine turbine aircraft. Its unclear if turboprop aircraft are involved

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