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US-China trade war: Why Boeing might benefit from potential thaw

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Via Fox Business

Boeing set to take huge financial hit

Fox Business Briefs: Boeing forced to shell out about $5 billion in the second quarter following disruptions and delays related to the troubled jetliner.

If, as President Trump indicated on Monday, there may be a coming thaw in the U.S.-China trade war, then aerospace giant Boeing may be a big beneficiary.

That’s because Boeing may soon be the recipient of a very substantial and lucrative aircraft order from China, according to Reuters, if the two countries are able to resolve their trade-related differences.

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“I think ultimately they will find a solution because of the mutual interest, and we think our airplane business will be part of that ultimate solution … It’s hard to predict whether or not a successful deal will be achieved. China’s been not ordering airplanes for the last year, year and a half. That pent-up demand signal is still there. The airplane need is real,” Boeing CEO Dennis Muilenburg said on Tuesday.

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Reuters previously reported, as recently as March, that there was the possibility for a big deal between Boeing and China “for more than 100 jets, worth well over $10 billion.” Boeing forecasts that China’s fleet of commercial aircraft will double over the next two decades and that the nation will need nearly 7,700 new airplanes, valued at $1.2 trillion.

Boeing announced in July “a $5.6 billion reduction in revenue and pre-tax earnings” as a total result of the FAA grounding of the 737 Max jets in March. This was due to the Ethiopian Airlines crash on March 10 that killed 157 people and the Lion Air crash last October that killed 189 people. Both crashes involved the Boeing 737 Max jet model.

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