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Chinese carriers seek compensation for Boeing 737 Max groundings

Air China Boeing 737 MAX 8 planes on the apron after after being grounded at Beijing Capital Airport. China’s three biggest airlines have filed claims seeking compensation from Boeing over the grounding © AFP / GREG BAKER

Shanghai, China, May 24 – China’s official airline association said Friday it will help 13 member carriers seek compensation from Boeing for losses already approaching $580 million due to the grounding of the 737 MAX 8.

“As time passes by, related losses will further increase,” the China Air Transport Association said in a statement.

“It’s still unknown when the aircraft will return to service.”

On March 11, China became the first country to ground the 737 MAX, a day after a deadly crash of an Ethiopian Airways Boeing 737 MAX that killed all 157 people on board.

That followed the crash last year of a Lion Air 737 MAX 8 which killed all 189 people on board.

By the end of June, the Chinese air transport business will have incurred losses totalling 4 billion yuan ($580 million), the association said.

By the end of March, 13 Chinese airlines had grounded a combined 96 Boeing 737 MAX 8 aircraft in their fleets.

The losses were incurred from the grounding of planes already in fleets, and the delayed delivery of planes that had been ordered.

More than 130 additional aircraft were due to be delivered to Chinese airlines this year.

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Earlier this week, China’s three biggest airlines — China Southern, China Eastern and Air China — were reported to have filed claims seeking compensation from Boeing.

The amounts being sought by the big three were not released.

Boeing acknowledged on Saturday that its 737 MAX flight simulator software used to train pilots was flawed and needed to be fixed.

The compensation claims come amid a bitter trade conflict between China and the United States.

Trump launched the trade war last year to extract economic reforms from Beijing, which he accuses of seeking to forge global industrial dominance through massive state intervention in markets and the theft of US technology.

The two sides have exchanged tariffs on more than $360 billion in two-way trade.

US aircraft have traditionally been among the single largest exports to China by value.

“We sincerely hope Boeing can attach great importance to the claims made by our member companies and resolve them reasonably and legally,” the Chinese airline association said.

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