Boeing China Supplies Hit by Regulatory Battery Review: Report – Boeing (NYSE:BA)

Deliveries Boeing Co A flight to China has reportedly experienced delays due to an inspection by Chinese regulators of batteries used in its cockpit voice recorder.

According to Reuters, Boeing is working with its Chinese customers on delivery schedules until the Civil Aviation Administration of China (CAAC) completes an assessment of batteries for the 25-hour cabin voice recorder.

In its end-2023 report, Boeing revealed that it has approximately 140 737 MAX 8 aircraft in stock, of which 85 are destined for Chinese customers.

While 22 aircraft were delivered to China by the end of April 2024, no new aircraft have been shipped to Chinese buyers recently due to the ongoing review.

Boeing Chief Financial Officer Brian West said last month that the company expects to deliver most of those planes by the end of the year.

The duration and impact of the review on Boeing’s delivery targets remain uncertain. The US Federal Aviation Administration (FAA) has certified the 25-hour CVR system, which can store more data than previous versions and is approved by European regulators.

Read also: Justice Department accuses Boeing of violating 2021 settlement

Ongoing trade tensions between the U.S. and China have compounded supply problems. U.S. trade officials announced higher tariffs on $18 billion worth of Chinese goods starting August 1.

In January, Boeing resumed deliveries of the 737 MAX to Chinese airlines, ending a nearly five-year suspension of imports. China was the first to ground Max jets after two crashes in 2018 and 2019 that killed 346 people.

This month, Congress passed legislation requiring all future planes to be equipped with 25-hour cockpit voice recorders.

Aircraft deliveries are critical to aircraft manufacturers like Boeing because they receive most of their payments at the time of delivery. Recently, China’s Ministry of Commerce announced restrictions on U.S. companies selling weapons to Taiwan from importing, exporting or investing in China. This includes Boeing Defense, Space & Security.

Boeing shares have lost about 8% over the past 12 months. Investors can gain exposure to stocks through IShares ETF of the US aerospace and defense industry (BATS:ITA) i Invesco Aerospace & Defense ETF (NYSE:PPA).

Read on: Boeing’s commercial plane deliveries decline in April amid production adjustments

Reduction: BA shares fell 8.06% on Wednesday at $186.28.

Reservation: This content was created in part using AI tools and reviewed and published by Benzinga editors.

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