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Home / World / The three largest Chinese airlines are seeking compensation from Boeing over the creation of 737 MAX

The three largest Chinese airlines are seeking compensation from Boeing over the creation of 737 MAX



PEKING (Reuters) – The three largest Chinese airlines have asked US aircraft maker Boeing Co to compensate for the losses caused by the ground-based landing and late delivery of 737 MAX jets.

FILE PHOTO: The Boeing logo is displayed at the Latin American Business Aviation Fair (LABACE) at Congonhas Airport in Sao Paulo, Brazil on August 14, 2018. REUTERS / Paulo Whitaker / File Photo

Requests for triple compensation come at a delicate time in Sino-US relations. A series of high-priced import tariffs culminate in Washington, which accuses Beijing of reversing almost all aspects of a proposed trade deal.

The US Government's recent US $ 200 billion Chinese duty increase – and indications of further – has sparked fears that China might take revenge on US companies. [Wednesday] Air China Ltd and China Southern Airlines Co Ltd told Reuters that the pair added their votes to China Eastern Airlines Corp Ltd, a compensation claim announced a day earlier.

The latest requests were first reported by Chinese state television.

China was the first country to land the 737 MAX two months ago after 157 people were killed in a crash in Ethiopia in March. This was the second such incident for Boeing's latest aircraft.

"China has hit 96 planes off the ground, about 4 percent of its aircraft. Grounding causes enormous losses for Chinese airlines, "said Chinese aviation expert Li Xiaojin to Reuters.

Li estimates that the daily losses for each airline amount to at least 100,000 yuan ($ 14,469.90) per aircraft.

"The potential costs are also enormous. The slower passenger growth at major Chinese airports in March and April was mainly due to the landing of 737 MAX jets, according to my calculations, "Li said.

China's government bond regulator quantified the number of China's three largest airlines 737 MAX jets on 53.

Airlines outside China have applied for compensation, including Turkish Airlines, United Airlines, Ryanair and Flydubai.

COORDINATED EFFORT

Bloomberg reported last week that major Chinese airlines are considering joining forces to seek compensation. On Tuesday, the state-run daily People's Daily said that China Eastern did not communicate with the other airlines prior to its request. China Eastern Reuters confirmed the contents of this report.

On Wednesday, however, the well-read tabloid Global Times reported that the action appeared to be a "concerted action".

"China now appears to be ready to put more pressure on Boeing as the company happens to have a real security problem and the trade dispute between the US and China has spiraled downward," the Global Times quoted Shen Yuxin, a law firm partner Freshfields Bruckhaus Deringer.

The most recent claims for compensation also come a day before the Federal Aviation Administration (UBA) convenes global regulators in Dallas to review Boeing's 737 MAX software and training proposals before regulators decide that Underlying transaction should be discontinued.

FILE PHOTO: The Air China logo can be seen on an Air China counter at a Beijing International Airport terminal on March 28, 2016. REUTERS / Kim Kyung-Hoon / File Photo

China and the Laut analysts, each European Union has its own aerospace industry and is therefore likely to set its own terms for the resumption of 737 MAX flights.

The International Air Transport Association convened a meeting of airlines with 737 MAX jets in Montreal on Thursday.

($ 1 = 6.9109 yuan renminbi)

coverage by Stella Qiu and Brenda Goh; Editors Himani Sarkar and Christopher Cushing

Our Standards: The Thomson Reuters Trust Principles.

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