What happened
Boeing (BA 1.34%) has faced setbacks selling planes to China, but the company apparently is making progress expanding its presence in other parts of the world. Shares of the aerospace giant traded up nearly 3% on Tuesday following reports the company is attempting to make inroads into the emerging India market.
So what
Boeing's 737 MAX was once expected to be among the top-selling commercial aircraft of all time, but a pair of fatal accidents led to an 18-month grounding of the plane in the U.S. and elsewhere. Though the plane has returned to service in most markets, China remains a stubborn holdout.
That's a problem for Boeing, as China is also among the world's most important aerospace growth markets. Investors are watching closely for signs the plane could be recertified in China soon, even sending the shares higher after a Mongolian airline was allowed to fly the MAX into China. But with geopolitical tensions between the U.S. and China running high, there is no clear timetable for when deliveries might be allowed to resume.
Boeing isn't waiting around for Chinese regulators to act. The company, according to a Bloomberg report, is marketing some of the 140 737 MAX jets it has built but is not allowed to deliver to Chinese customers to Air India.
The report quotes an unnamed source who says that as many as 50 of the 140 planes might be resold. The move could turn up the pressure domestic airlines put on Chinese regulators to move past the ban and would help rebuild Boeing's cash stockpile following the pandemic.
Now what
If Boeing decides to remarket the 737 MAX planes earmarked for China, it should find plenty of buyers. Demand is high for newer, more fuel-efficient narrow-body jets from Boeing and Airbus as airlines around the globe try to modernize their fleets and cut their fuel costs.
Boeing's shares have been in a holding pattern because the company faces headwinds, like the situation in China, that can't be worked through overnight. No doubt, the reported talks with Air India are if nothing else a step in the right direction.
Ultimately, the ideal answer for Boeing is both a return to normalcy with China and a growing presence in India, an emerging market with massive potential for future domestic airline growth.
