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China Issues Directive to Bring Boeing 737 Max Back to the Skies After More Than 2 Years

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  • China was the first country to ground the 737 Max after the second of two fatal crashes more than two years ago.
  • The directive sets the steps necessary to bring the planes back to flight again.
  • Shares of Boeing and Max fuselage maker Spirit AeroSystems surged on the news.

Chinese aviation regulators on Thursday instructed airlines to make the changes needed to fly Boeing's 737 Max planes again, indicating China could lift its more than 2½ year grounding of the aircraft.

China was the first of dozens of countries, including the U.S., to ground the Boeing 737 Max in March 2019 shortly after the second of two fatal crashes in five months, which together killed 346 people. The Federal Aviation Administration cleared the planes to fly in November 2020 after Boeing made software and other changes.

"After conducting sufficient assessment, CAAC considers the corrective actions are adequate to address this unsafe condition," the Civil Aviation Administration of China said in an airworthiness directive, posted on its website.

Shares of the aircraft manufacturer were up more than 5% in afternoon trading, while Spirit AeroSystems, which makes the fuselages, was trading more than 6% higher.

"The CAAC's decision is an important milestone toward safely returning the 737 MAX to service in China," Boeing said in a statement. "Boeing continues to work with regulators and our customers to return the airplane to service worldwide."

Boeing's CEO, Dave Calhoun, told analysts on a quarterly call in October that the company expected China to lift the grounding by the end of the year and that deliveries of the planes in that country would likely resume in the first quarter of 2022.

CFO Brian West said on the Oct. 27 call that about one-third of the roughly 370 Max planes Boeing has in inventory are for Chinese airlines.

More than 180 countries have now lifted bans on the Max but Indonesia, where the first of the two crashes took place, and Russia have still not signed off.

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