Shares of Boeing are higher in U.S. premarket trading Thursday after China's aviation authority issued an airworthiness directive on the 737 MAX, and the planemaker's engine supplier provided a positive outlook.
After more than two and a half years, the 737 MAX is on track to return to service in China, according to Reuters, citing a report from the Civil Aviation Administration of China (CAAC). The airworthiness directive instructs carriers on the changes required before the plane can return to service, although there was no timeframe on when the 737 MAX will return to the skies.
Shares of Boeing are up more than 4% in the U.S. premarket. Boeing said the directive is a 'major milestone' towards returning the 737 MAX to service across China.
"After conducting sufficient assessment, CAAC considers the corrective actions are adequate to address this unsafe condition," CAAC said in a statement.
"The CAAC's decision is an important milestone toward safely returning the 737 MAX to service in China," Boeing said on Thursday. "Boeing continues to work with regulators and our customers to return the airplane to service worldwide."
For a return to service, CAAC requested three things from Boeing:
- Certified design changes of the plane,
- Proper training for pilots,
- And a comprehensive analysis of the two deadly crashes in 2018 and 2019 resulted in the worldwide grounding of the planes.
If the 737 MAX market reopens in China, this could be a massive win for Boeing. About 33% of the 370 undelivered commercial jets in storage are for Chinese carriers.
There was more good news as the planemaker's engine supplier, Safran SA, is preparing to increase production to about 50 planes per month, beginning in 2023, Safran CEO Olivier Andries told reporters on Thursday.
China is one of the last countries to approve the 737 MAX for flight. Other Asia-Pacific countries, including Japan, Australia, India, Singapore, Malaysia, and Fiji, have already approved the plane's return.