Airlines in China seek 737 MAX Compensation payouts from Boeing

Aviation World News

The 737 Max, which has been the US aviation giant Boeing’s best-selling plane, was grounded this year after it was involved in a deadly crash for the second time in five months.

In October, Lion Air Flight 610 plunged into the Java Sea off Indonesia shortly after takeoff, killing all 189 onboard. In March, Ethiopian Airlines Flight 302 crashed into the ground a few minutes after departing Addis Ababa, resulting in the deaths of all 157 onboard.

The 737 Max remains grounded as Boeing works on a software fix for a flight control system that is suspected of contributing to both crashes. Some airlines have even announced that they will cancel their 737 Max orders over concerns about the plane’s safety.

Today, Boeing is facing compensation claims from the three biggest airlines in China, which have grounded dozens of 737 Max jetliners since the deadly crash of an Ethiopian Airlines flight in March.

The airlines, Air China, China Eastern and China Southern, which are all state-controlled, said on Wednesday that they had asked for payouts, confirming reports in state-run news media. Xiamen Airlines, a smaller carrier, also said it would seek compensation.

The four airlines accounted for about half of China’s fleet of nearly 100 737 Max 8 jetliners in service when Chinese regulators grounded the plane less than a day after the March crash.

The move was quickly followed by regulators around the world, underscoring China’s growing influence in aviation safety. At a daily news briefing on Tuesday, Lu Kang, a spokesman for the Chinese Foreign Ministry, did not comment directly on the compensation claims but said it was “beyond reproach” that airlines would work to “protect their legitimate rights and interests in accordance with the law.”

Reports in media suggest that  “grounding Boeing 737 MAX 8 planes had resulted in great losses for the airlines, and the losses are still expanding”.

Shanghai-based China Eastern has grounded its 14 MAX planes while Boeing addresses the safety risks.

Chinese media have previously reported that a combined 96 MAX aircraft were in service among all of China’s carriers.

Other airlines have already said that they will ask Boeing for compensation for losses resulting from the groundings, including carriers in India, Norway and Poland. It is unclear how much the grounding will cost Boeing. Analysts have pegged the potential price at more than $100 million per month.