China's big three airlines seek compensation from Boeing

World | REUTERS 23 May 2019

China's three biggest airlines have asked US plane maker Boeing Co to compensate them for losses caused by the grounding and delayed deliveries of 737 MAX jets, just as regulators gather to discuss design changes for the troubled aircraft.

The triple compensation requests come at a sensitive time in Sino-US relations, with a string of tit-for-tat import tariffs.

Air China Ltd and China Southern Airlines Co Ltd said they have added their voices to a compensation request from China Eastern Airlines Corp Ltd announced a day earlier.

China was the first country to ground the 737 MAX two months ago after a crash in Ethiopia killed 157 people in March, the second such incident for Boeing's newest aircraft.

"China has grounded 96 aircraft, which is about 4 percent of its airplanes. The grounding causes huge losses for Chinese airlines," China aviation expert Li Xiaojin said.

Daily losses are likely to be at least 100,000 yuan (HK$113,724) per aircraft for each airline, Li estimated.

"The potential costs are huge too. Slower growth in passenger volume across China's major airports for March and April was largely due to the grounding of 737 MAX jets, according to my calculations," Li said.

Fifty-three 737 MAX jets are operated by the three carriers.

International carriers that have requested compensation include Turkish Airlines, United Airlines, Ryanair and Flydubai.

Bloomberg last week reported the Chinese airlines were considering teaming up to seek compensation.

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