Chinese airline delays Boeing jet delivery

Juneyao Airlines Delays Boeing Aircraft Delivery Due to Escalating Trade War

Juneyao Airlines is delaying the delivery of a Boeing widebody aircraft, valued at about US$120 million, due to the escalating trade war between Washington and Beijing. The airline was set to take delivery of the 787-9 Dreamliner in about three weeks, but will now hold off due to President Donald Trump’s tariffs on China.

Reasons for the Delay

Beijing has instituted retaliatory tariffs on US-made goods, making it difficult for the airline to take delivery of the aircraft. The tariffs have driven up the price of big-ticket goods, making it unfeasible for Juneyao to proceed with the delivery.

Impact on Boeing and Juneyao

Boeing shares fell in New York after Bloomberg News reported on the delivery delay, declining as much as 2.3 per cent. The stock had earlier gained. Juneyao’s decision to delay the delivery also risks delaying its international expansion, which was reliant on deliveries of long-range Boeing aircraft.

Other Companies Affected

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 has stopped taking orders in China for Model S sedans and Model X sport utility vehicles – both of which are imported from the US.

Boeing’s Struggles in China

The budding trade war represents the latest setback for Boeing in a market forecast to make up 20 per cent 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.

Trade War Escalation

China announced on Friday (Apr 11) that it will raise tariffs on all US goods to 125 per cent starting Saturday, after Trump imposed an equivalent charge designed to counter America’s trade deficit and punish Beijing for retaliating against US import taxes. On top of a 20 per cent levy put in place earlier this year over China’s role in fentanyl trafficking, that means the rate of US tariffs on China is now 145 per cent.

Conclusion

The escalating trade war between Washington and Beijing is having a significant impact on global businesses, including Juneyao Airlines and Boeing. The delay in the delivery of the Boeing aircraft is just the latest example of the consequences of the trade war, which is driving up the price of big-ticket goods and making it difficult for companies to operate in the affected markets.

FAQs

Q: Why is Juneyao Airlines delaying the delivery of the Boeing aircraft?
A: Juneyao Airlines is delaying the delivery due to the escalating trade war between Washington and Beijing, which has driven up the price of big-ticket goods and made it difficult for the airline to take delivery of the aircraft.

Q: What are the implications for Boeing?
A: The delay in the delivery of the aircraft will likely impact Boeing’s shares and may also hurt supply chains that had been severely strained ever since the pandemic and were only now showing signs of getting back to normal.

Q: Which other companies have been affected by the trade war?
A: Tesla has stopped taking orders in China for Model S sedans and Model X sport utility vehicles – both of which are imported from the US.

Q: What is the impact on Juneyao Airlines’ international expansion plans?
A: The delay in the delivery of the aircraft risks delaying Juneyao Airlines’ international expansion plans, which were reliant on deliveries of long-range Boeing aircraft.