Offloading jetliners. Boeing offers 737 Max Jets to Air India amid US-China trade tensions

Boeing Co. is offering 737 Max jets once slated for Chinese customers to Air India Ltd. as the planemaker tries to offload some of the roughly 140 aircrafts it’s currently not allowed to deliver.

The Indian carrier, which is overhauling its fleet under new owner Tata Group, is one of a number of potential customers for Boeing, which is in talks with lessors and other airlines, according to people familiar with the matter. Many operators are eager to line up new narrowbody jets while Boeing and rival Airbus SE struggle to hit production targets amid labor and parts shortages.

A Boeing representative declined to comment. Air India didn’t immediately respond to a request for comment outside of regular business hours.

The US manufacturer hasn’t been allowed to deliver Max aircraft to China for more than three years as it grapples with escalating trade tensions and repercussions from two fatal crashes of the workhorse jet. China was the first to ground the Max in March 2019, and held off approving its return long after US regulators lifted a ban in late 2020.

Dave Calhoun, the company’s CEO, told reporters in September that Boeing “can’t wait forever” and was putting a small number of jets back on the market. The planemaker has about $5 billion in cash tied up in the already-built jets earmarked for China, according to an analyst with Bloomberg Intelligence.

One person tracking discussions estimates as many as 50 of the planes may be resold. The aircraft could be sold on an “as-is” basis, which means buyers would be responsible for repainting them and installing their own cabin equipment, said the person, who asked not to be identified sharing details of confidential discussions.

Fleet Overhaul

Air India has sought to order as many as 300 narrowbody aircraft to revamp its fleet following the takeover by Tata, , Bloomberg News reported in June.

Even if the Max jetliners rolled out of Boeing’s factory in 2018 or 2019, they will be considered brand new by most appraisers when they’re finally delivered. Until that milestone occurs, the planes are technically considered to be still in Boeing’s production system, said George Dimitroff, head of valuations for aviation research firm, Cirium.

Ultimately, Chinese airlines will probably take the majority of the 737s they’ve ordered from Boeing, Dimitroff said. 

“They might not necessarily take all of the aircraft that are currently already built and are waiting for them,” he added. “They may let go of some of those already built for Boeing to re-market, while they take new-production aircraft at a later date or a mix of the two.”

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