What happened

The 737 MAX could be nearing its long-awaited return to the all-important China market, and shares of plane manufacturer Boeing (BA -0.20%) are taking off as a result. Shares of Boeing traded up 5% on Wednesday morning after a report that one of its Chinese customers is conducting 737 MAX test flights.

So what

Boeing's 737 MAX is slowly staging a comeback. The plane was once viewed as likely to break records for total units sold, but a pair of fatal accidents in late 2018 and early 2019 led to it being grounded internationally for 18 months. The MAX was cleared to resume service in the U.S. and other parts of the world in December 2020, but has not yet flown again in China.

China's aviation regulator cleared the plane to be used in service in late 2021, but required the 737 MAX be modified and mandated additional pilot training before it can be returned to scheduled service.

It appears at least one major Boeing customer is making progress completing that checklist. On Wednesday Reuters reported that China Southern Airlines has recently begun test flights ahead of a possible return to service. China Southern is the largest Chinese operator of MAX aircraft.

The Chinese airline is reportedly seeking to bring the plane back online ahead of expected improving domestic demand after a two-month lockdown of Shanghai and other key Chinese markets due to COVID-19.

Now what

The importance of the Chinese market to Boeing cannot be overstated. China has accounted for about 20% of Boeing commercial deliveries since 2017, and is expected to soak up about 25% of new aircraft produced over the next decade. The 737 MAX is Boeing's flagship narrowbody plane, the ones used primarily for domestic flying, and absent vibrant sales in China the program would be in serious trouble.

Boeing has faced significant turbulence in recent years, first due to the 737 MAX issues and then due to the pandemic. The company's total debt has ballooned by 400% over the past five years as Boeing scrambled to stay liquid as plane sales fell off. The only way for Boeing to pay down that debt and normalize its balance sheet is healthy new plane sales.

For Boeing, a 737 MAX return to China is but one small step in a long recovery process, and investors should be careful not to get too excited by the reports or assume the company's troubles will quickly fade. But this would be an important step, and the stock is reacting favorably as a result.