Boeing Offers 737 Max Jets To Air India Amid US-China Trade Tensions: Report

Air India has sought to order as many as 300 narrow-body aircraft to revamp its fleet following the takeover by Tata Group

Air India, which is overhauling its fleet, is one of a number of potential customers for Boeing, is in talks with lessors and other airlines.

Source : Getty

US-based Boeing Co. is offering 737 Max jets to Air India Ltd, once slated for China, as the planemaker tries to offload some of its roughly 140 aircraft it’s currently not allowed to deliver, news agency Bloomberg reported on Tuesday.

Tata-owned Air India, which is overhauling its fleet, is one of a number of potential customers for Boeing, is in talks with lessors and other airlines, sources privy to the development told the news agency. Many operators are eager to line up new narrow-body jets, while Boeing and rival Airbus SE struggle to hit production targets amid labour and parts shortages.

A Boeing representative, however, declined on Bloomberg’s request to comment. Air India also didn’t immediately respond.

According to the Bloomberg report, the US firm 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, Boeing’s chief executive officer (CEO), said 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 George Ferguson, analyst with Bloomberg Intelligence.

One of the sources said as many as 50 of the planes may be resold. The aircraft could be sold on an "as-is" basis, which means the 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.

Air India has sought to order as many as 300 narrow-body aircraft to revamp its fleet following the takeover by Tata Group.

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 said, while adding, "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."