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More Chinese airlines could seek compensation from Boeing amid trade war

05/22/2019| 5:44:06 PM|

Major carriers such as China Southern Airlines has grounded 24 Boeing 737 MAX planes with Air China grounded 15, and Hainan Airlines grounded 11.

After China Eastern Airlines became the first domestic carrier to seek compensation from Boeing Co for losses caused by the grounding of the US plane maker's flawed 737 MAX aircraft, more Chinese airlines could follow suit amid an escalating trade and technology battle between China and the US, according to industry insiders.

China Eastern formally filed a claim with Boeing asking for compensation for losses caused by the grounding of the airline's 14 Boeing 737 MAX planes and delayed delivery of more aircraft, a spokesperson for the airline confirmed to the Global Times on Tuesday.

In a statement, China Eastern said that the grounding caused "relatively large" losses, which continue to snowball as the company still awaits information from Chinese authorities and Boeing about the possibility of the planes returning to service.

The airline did not disclose further details, including how much compensation it was seeking from the US planemaker. A spokesperson for Boeing declined to comment on Tuesday, telling the Global Times that "we don't discuss our conversations with customers."

Asked about China Eastern's decision at a routine press briefing on Tuesday, Lu Kang, a spokesperson for the Chinese Foreign Ministry, said that though the ministry does not comment on companies' commercial activities, he believes that any company may pursue its legitimate and reasonable interests through legal means. "This is beyond reproach," he said.

Lu also pointed out the Boeing 737 MAX aircraft was grounded globally because it has safety risks and technical problems that were not resolved.

China Eastern's move comes as China and the US are mired in an escalating trade and technology battle after the US broke a truce and slapped tariffs on Chinese goods and banned Chinese technology company Huawei from buying US components.

More than a dozen Chinese airlines have grounded a total of 96 Boeing 737 MAX planes since March 11, when national authorities ordered domestic airlines to ground the jet after its second deadly crash in Ethiopia, which killed all 257 people on board.

Among the airlines are major carriers such as China Southern Airlines, which grounded 24 MAX planes, Air China, which grounded 15, and Hainan Airlines, which grounded 11. None of these airlines responded to requests for comment as of press time on Tuesday.

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TAGS: China Eastern Airlines | Boeing 737 MAX
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