BEIJING: China’s Juneyao Airlines Co is delaying delivery of a Boeing Co widebody aircraft, according to people familiar with the matter, highlighting how the escalating trade war between Washington and Beijing is driving up the price of big-ticket goods.
Juneyao was due to take delivery of the 787-9 Dreamliner, valued at about US$120mil, from the US planemaker in about three weeks, but will now hold off due to President Donald Trump’s tariffs on China, said the people, asking not to be identified discussing information that’s private.
Beijing has instituted retaliatory tariffs on US-made goods.
The Chinese airline joins a growing list of companies on both sides of the dispute suspending the exchange of goods due to the punishing levies.
Tesla Inc has stopped taking orders in China for Model S sedans and Model X sport utility vehicles – both of which are imported from the United States.
The budding trade war represents the latest setback for Boeing in a market forecast to make up 20% of global aircraft demand over the next two decades.
In 2018, nearly a quarter of the US planemaker’s output ended up in China, but it hasn’t announced a major order there for years. Some of the issues have been self-inflicted – China was the first to ground the 737 Max in 2019 after two deadly crashes, and last year’s quality crisis following a door-panel expulsion slowed a recovery in delivery volumes.
But trade tensions have been another recurring theme, and are heating up at a time when Boeing still has dozens of finished planes in inventory that were originally meant for Chinese customers.
For Shanghai-based Juneyao, the postponement risks delaying its international expansion. The airline had planned to increase flights to Europe, including Brussels and Athens, from the summer. — Bloomberg
