By David Shepardson and Allison Lampert
(Reuters) -Boeing's plane deliveries to China have been delayed in recent weeks due to a Chinese regulatory review of batteries powering the cockpit voice recorder, a source familiar with the matter told Reuters.
The U.S. planemaker said in a statement it is working with Chinese customers on the timing of their deliveries as the Civil Aviation Administration of China completes its review of batteries contained within the 25-hour cockpit voice recorder.
In a year-end 2023 filing, Boeing (NYSE:BA) said it had about 140 737 MAX 8 aircraft in inventory, including 85 aircraft for customers in China. Boeing has delivered 22 aircraft to China in 2024 through the end of April but in recent weeks the company has not delivered any new planes to Chinese customers pending the review, which had not been previously reported.
Boeing Chief Financial Officer Brian West told investors last month the planemaker still expected "to deliver most of these inventoried airplanes by year-end."
It is unclear how long the review may last or the extent to which it may impact Boeing delivery targets.
Boeing said the Federal Aviation Administration has certified the 25-hour CVR system, which stores more data than earlier versions of cockpit voice recorders (CVR) and has been accepted by European regulators.
"We defer to the FAA and the CAAC on this regulatory discussion," Boeing said. The FAA did not immediately comment.
Trade tensions have persisted between the world's two largest economies. On Wednesday, U.S. trade officials said new higher tariffs on $18 billion in Chinese goods would start to take effect on Aug. 1.
Boeing in January resumed deliveries of its strongest-selling 737 MAX jet to a Chinese airline, ending an almost five-year import freeze and heralding the potential delivery of a backlog of dozens of finished MAXs to China
China was the first country to ground MAX jets after two accidents in 2018 and 2019 that killed 346 people.
Congress this month approved legislation mandating all future planes be included with 25-hour cockpit voice recorders.
Aircraft deliveries are closely watched by Wall Street because planemakers are able to collect most of the money due when they hand over jets to customers.
China's Commerce Ministry said on Monday it will prohibit some U.S. firms from importing and exporting activities related to China, including one selling arms to Taiwan, and forbid them from making new investments in China, Reuters reported, citing state media. Boeing Defense, Space & Security is on the list.
Boeing deliveries to China have been a source of frustration for U.S. officials.
In 2021, Commerce Secretary Gina Raimondo said the Chinese government was preventing its domestic airlines from buying "tens of billions of dollars" of U.S.-manufactured Boeing airplanes.