Amid the fallout from the "tariff war," a Chinese airline has returned Boeing aircraft it intended to import to the United States, while Boeing is reviewing order redistribution. This is interpreted as a judgment that it cannot supply aircraft to Chinese airlines for the time being.
According to the Financial Times (FT) on the 23rd (local time), Cal Oatberg, CEO of Boeing, confirmed that a Chinese airline had halted the acquisition of Boeing aircraft due to the tariff war, stating, "If customers say they will not take the aircraft, we will no longer make aircraft for those customers." This implies that it will no longer accept orders from Chinese airlines.
Oatberg noted that they are taking "a very direct approach" to the situation of non-acceptance of aircraft from China, adding that they could resell aircraft already in production or reallocate them to other customers. He emphasized, "There are many customers wanting to receive aircraft in the short term," stating that "this will not hinder our company's recovery." Boeing has been experiencing poor performance following a series of 737 MAX aircraft accidents last year, but is currently in recovery.
Earlier on the 20th, Reuters reported, citing flight tracking website AirNav RAY, that a Boeing 737 MAX aircraft, which was scheduled to be delivered to Xiamen Airlines in China, had returned to the U.S. This aircraft reportedly took off from Boeing's final assembly center in Zhoushan, Zhejiang Province, China, and landed at Boeing's production facility in Seattle, Washington, U.S. after passing through Guam and Hawaii.
According to FT, Chinese airlines have already returned two aircraft they were scheduled to acquire from Boeing, and the return of a third aircraft is in progress. Chinese airlines were expected to receive about 50 aircraft from Boeing by the end of this year. Of these, approximately 90%, or 41 aircraft, have either been completed or are in production.
The reason China has refused to acquire Boeing aircraft is that the costs of aircraft acquisition have surged due to the "tariff war." FT reported, "Due to China's retaliatory tariffs, the prices of Boeing aircraft have become more expensive for Chinese airline customers." President Trump has imposed a total tariff of 145% on items imported from China since shortly after taking office in January, and in retaliation, China has increased the tariff rate against the U.S. to 125% since the 12th.
India is emerging as an alternative to China. Ron Epstein, a Bank of America analyst, noted that "despite the uncertainty regarding the delivery of 737 aircraft to China, Boeing will have no trouble reallocating these aircraft to other airlines that need additional capacity," stating that "India is emerging as a strong candidate."
India is also proactive in acquiring passenger aircraft returned from China. On the 22nd, Indian media Times of India reported that Indian airline Air India is pushing for the acquisition of Boeing aircraft that China has halted, stating, "This airline, owned by the Tata Group, needs additional aircraft for innovation." Air India had also received 41 Boeing 737 MAX aircraft in 2019 that China suspended operations on for safety reasons.
The media reported that "Indian airlines, which are struggling to acquire aircraft due to the limits of the global supply chain, are feeling relieved by China's directive to refuse the acquisition of Boeing passenger aircraft," adding that "Chinese airlines were scheduled to acquire about 100 737 MAX and 11 787 Dreamliner aircraft, all of which are the types desired by Indian airlines."
Malaysia is also showing interest in the aircraft returned by China. Various foreign media reported on the 22nd that a senior executive of Malaysia Airlines Group, the parent company of Malaysia Airlines, is currently negotiating new aircraft purchases with Boeing. Malaysia Airlines is reportedly viewing U.S.-China tensions as an opportunity for early aircraft delivery.