Juneyao Airlines Receives Boeing 787-9 Amid Anticipated Resumption of Deliveries in China

Summary

• The 787-9 aircraft was delivered by Boeing to Juneyao Airlines, a private Chinese carrier.
• This followed China suspending most Boeing orders and deliveries in 2019 due to fatal crashes tied to the 737 MAX.
• A resumption of MAX deliveries could change Boeing’s relationship with China for the better, tapping into China’s demand for 20% of the world’s aircraft by 2042.
• Last Dreamliner plane was delivered to a Chinese leasee in 2021, while the last to the Chinese airlines was in November 2019.
• Boeing is ready to deliver 12 out of 60 undelivered Dreamliner aircraft in their inventory to Chinese operators
• Despite political concerns between the US and China, Boeing’s business with China shows potential due to recent positive discussions between the nations’ leaders.
• New MAX deliveries are still on hold in China, although safety bans have been lifted and existing planes are operational.
• Potential MAX deliveries to China could positively affect Boeing’s $10 billion free cash flow target for 2025-26.

Boeing’s Latest Delivery

Juneyao Airlines, a privately-held Chinese airline, received Boeing’s 787-9 aircraft on Thursday. Boeing confirmed that the aircraft left for China from Everett Paine Field in Washington state, expecting to arrive in Shanghai around 3:30 p.m. local time (0730 GMT).

Suspension of Boeing Deliveries in China

The 737 MAX’s worldwide grounding in 2019 after two fatal crashes led China to suspend most Boeing orders and deliveries. Resuming MAX deliveries could signify a change in Boeing’s relationship with China. This shift could allow Boeing to deplete several of its plane stocks while potentially facilitating larger breakthroughs in orders and deliveries in the future.

China’s Upcoming Aircraft Demand

Boeing anticipates that by 2042, China will constitute 20% of the world’s aircraft needs. In 2021, Boeing last delivered a Dreamliner to a Chinese lessee. However, since November 2019, no 787s have been directly delivered to Chinese airlines.

Analysts Predict Resumption of Dreamliner Deliveries

Statement from AAP/AIR consultancy, citing preparatory flight activities for a 787 assigned to Juneyao Airlines with a B-20EQ registration, hinted towards resumption of Dreamliner deliveries to China. Furthermore, according to Jefferies, twelve of Boeing’s 60 undelivered 787s are dedicated to Chinese operators.

The Political Climate

Boeing’s Chinese dealings weigh heavily on the political relationship between the US and China. However, recently, this relationship is observed to have become more positive. In fact, the presidents of both nations held their first in-person meeting in a year.

Progress with the MAX Deliveries

On Wednesday, The Air Current reported that the Civil Aviation Administration of China (CAAC) this month gave Boeing clearance to prepare MAX aircraft for delivery. Existing MAX planes are already operational within China, but new deliveries remain paused.

Final Approval Required

China’s National Development and Reform Commission (NDRC) must approve individual MAX deliveries to China. Unfortunately, neither the CAAC or NDRC has responded to requests for comment yet. Analysts suggest that delivering the MAX to China could increase Boeing’s $10 billion free cash flow target for 2025-2026, especially as this estimate did not include potential deliveries to China.

Implications for the Forex Market

These developments in Boeing’s relationship with China and the potential for more deliveries could impact the trading of Boeing’s stocks and potentially influence the forex market, especially given China’s expected demand for 20% of the world’s aircraft by 2042.

(This content has been adjusted for reporting inaccuracies)