Chinese airlines demand compensation from Boeing

Demand comes over 737 Max grounding

By Michelle Toh and Serenitie Wang, CNN Business
Dan Kitwood/Getty Images

(CNN) - Three of China's largest airlines have joined a growing list of carriers demanding compensation from Boeing over the grounding of its 737 Max aircraft.

Air China, China Eastern Airlines and China Southern Airlines told CNN Business on Wednesday that they have asked to be reimbursed for costs they have incurred since the plane was deemed unsafe to fly following two crashes.

They cited losses caused by being unable to fly the aircraft and delayed deliveries of more jets.

The companies did not disclose how much in damages they are seeking from Boeing.

China Southern has as many as 24 737 Max jets and Air China has 15 of the planes in its fleet, spokespeople for the companies said. China Eastern has 14 737 Max planes, according to Chinese state-run media.

The 737 Max, Boeing's best-selling plane, has been grounded since March. China was the first country to ban the 737 Max 8 from its skies after an Ethiopian Airlines flight crashed earlier that month, killing all 157 people on board. That followed another tragic incident in October, when a 737 Max 8 operated by Lion Air crashed off of Indonesia, leaving 189 passengers dead.

The grounding has already cost airlines hundreds of millions of dollars. American Airlines, Southwest Airlines and Norwegian Air all revealed last month that the loss of the troubled plane has forced them to cancel a growing number of flights, and will cost them nearly $600 million combined.

Norwegian Air and Flydubai, budget carriers in Europe and the Middle East respectively, have also demanded money back from Boeing recently, and Turkish Air and Ryanair are reportedly seeking compensation, too. Ryanair and Turkish Air did not immediately respond to a request for comment from CNN Business.

The continuing crisis is already hurting Boeing's bottom line. The company reported in April that profits fell 21% in the first quarter of this year because of safety questions clouding the company's reputation.

Airlines have completely stopped ordering the jet in the wake of the two crashes. There were zero orders for the 737 Max in March, and only 10 purchases in the first quarter of 2019 compared to 112 in the same period last year, according to data released by Boeing last month.

Jordan Valinsky contributed to this report.

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