China’s biggest airlines sought compensation from Boeing for order delays and losses caused by the grounding of its 737 Max jet in the wake of two deadly crashes.
Air China and China Southern Airlines filed formal claims with the U.S. aircraft manufacturer, the carriers’ representatives said Wednesday. China Eastern Airlines said yesterday it had sought compensation, stating that the suspension has caused big losses that continue to widen.
The “big three” state-run carriers operate 53 of the 96 Max planes now lying idle in the country, according to data from local aviation statistics provider VariFlight. They also account for 65 percent of passengers who flew Chinese airlines in 2018, according to the Civil Aviation Administration of China.
“The 737 MAX aircraft have been grounded globally for security concerns and the technical problems have yet to be solved,” Ministry of Foreign Affairs spokesman Lu Kang told reporters in Beijing on Tuesday when asked about China Eastern’s claim. “A company can claim its legitimate rights.”
The back-to-back claims could give the airlines leverage to gain concessions as China’s influence in the aviation world soars. The country was the first major authority to ground the top-selling Max in March, disregarding the views of the U.S. authority at the time that the plane was safe to fly.
Other Chinese carriers including Xiamen Airlines, Hainan Airlines, Shenzhen Airlines and Shandong Airlines have also taken delivery of the Max, while Ruili Airlines, Donghai Airlines and Okay Airways are awaiting their first jets.
It’s uncertain when the Max might return to service. U.S. aviation regulators expect to receive Boeing’s proposed software fix for the aircraft as soon as this week, and will then begin a review that will include test flights and input from a technical advisory board.
Boeing, meanwhile, is finalizing an update to a software system implicated in both crashes. Lion Air Flight 610 was the first Max to crash, in the waters off Indonesia in late October, killing all 189 people on board. Less than five months later, a second Max crashed in Ethiopia, killing 157 passengers.
©2019 Bloomberg L.P.
Photo Credit: An Air China plane at Beijing International Airport. Bloomberg.