China Tried to Link 737 Max Approval to Support for Its Own Jets
(Bloomberg) -- As Boeing Co.’s 737 Max was about to enter service in 2017 it became the subject of an unusual diplomatic exchange.
Chinese officials, eager to enter the global aircraft manufacturing market dominated by Boeing and Europe’s Airbus SE, raised the prospect with their U.S. counterparts of clearing Boeing’s aircraft for use in China in exchange for favorable treatment of jetliners it had under development.
The U.S. Federal Aviation Administration refused when asked by U.S. trade officials who were eyeing more American exports, including aircraft to the Asian nation, according to three people with knowledge of the talks. China certified the Max anyway.
In March, China was one of the first countries to ground the 737 Max after one of the planes crashed in Ethiopia. In October, a 737 Max crashed in Indonesia. China’s willingness to permit the jet to fly again will be closely watched, and could loom in the background of tense trade talks now under way with the U.S.
The aviation industry and regulatory framework in the U.S. and China have had a complex and sometimes tense relationship for decades. In the 2000s, the FAA worked closely with China to help it set up a more mature regulatory oversight system. The result was a dramatically lower accident rate and closer relations.
But China has been frustrated with the U.S. reluctance to certify its locally-made jets. While the Commercial Aircraft Corp. of China Ltd.’s ARJ21 twin-engined regional jet entered service in China in 2014, it hasn’t been approved for commercial flights in the U.S.
Comac has also built a larger aircraft, the C919, which holds close to 200 passengers and is designed to compete directly against the Max as well as Airbus SE’s A320neo. The C919 first flew in May 2017, just after the FAA certified the Max. It isn’t expected to enter service for several years.
While Chinese officials made no overt demands on the U.S. government during the 2017 period as the Max aircraft were being certified, their intentions were clear, according to people who participated or were briefed on the issue.
“That’s the opposite of safety,” said Richard Aboulafia, an aerospace analyst with the Teal Group who’s written that the grounding of the Max plays into China’s hands during the trade talks. He had no direct knowledge of the 2017 communications.
At the time, high-ranking Boeing officials contacted leaders of the FAA expressing concerns that China might be preparing to slow its approval of the new plane.
Similarly, U.S. trade officials reached out to the FAA to ask whether the agency would be willing to move forward more quickly on approving Chinese aircraft. After FAA officials explained that aircraft were certified under complex, highly technical legal standards, the trade officials didn’t press for leniency for the Chinese, according to one of the people.
The FAA declined to comment on the issue. The Chinese embassy in Washington didn’t respond to multiple requests for comment.
Boeing declined to comment directly on the 2017 talks. “We continue to share information and work with global regulators and customers to return the 737 Max fleet to service,” it said in a statement.
Not all recent interactions between U.S. and Chinese aviation regulators have been fraught. In October 2017, just before Trump visited China, the two nations signed a bilateral agreement to work more closely on certifying each others’ aircraft.
Boeing is developing a software fix for the 737 Max family of jets to modify a safety system implicated in the crashes in Indonesia and Ethiopia that killed a total of 346 people. In both cases, a malfunctioning sensor caused the system to repeatedly drive down the nose until pilots became overwhelmed and the planes crashed.
©2019 Bloomberg L.P.