Chinese airlines seek Boeing compensation over 737 MAX grounding

May 22, 2019 15:48
China's biggest carriers are said to have sought compensation from Boeing over grounding and delayed deliveries of 737 MAX jets. Photo: Bloomberg

China's three biggest airlines -- Air China, China Southern Airlines and China Eastern Airlines -- have asked US planemaker Boeing to compensate them for losses caused by the grounding and delayed deliveries of 737 MAX jets, Reuters reports.

China was the first country to ground the 737 MAX globally after a crash in Ethiopia killed 157 people in March, in the second such incident for Boeing’s newest aircraft.

“China has grounded 96 aircraft, which is about 4 percent of its airplanes. The grounding causes huge losses for Chinese airlines,” China aviation expert Li Xiaojin told Reuters.

Daily losses are likely to be at least 100,000 yuan (US$14,470) per aircraft for each airline, Li estimated.

“The potential costs are huge too. Slower growth in passenger volume across China’s major airports for March and April was largely due to the grounding of 737 MAX jets, according to my calculations,” Li said.

Carriers outside China have also asked Boeing for compensation, including Turkish Airlines, United Airlines, Ryanair and Flydubai.

The compensation requests come as China and the United States engage in an escalating trade war, with Washington accusing Beijing of backtracking on almost all aspects of a proposed trade deal.

The US administration has since raised tariffs on US$200 billion Chinese imports and has indicated more, prompting fear that China could retaliate against US companies.

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