A Boeing (BA -1.12%) 737 MAX appears to have flown in China for the first time in nearly four years. The idea of the company's most important plane resuming operations in the world's most important market was enough to give the stock an initial lift, sending Boeing shares up as much as 4.6% on Monday morning.
Boeing's 737 MAX has created a lot of turbulence for investors. When the plane debuted in 2017, it was billed as having the potential to be the most successful model in aviation history, but a pair of fatal crashes led to a March 2019 grounding and a series of probes into Boeing engineering and quality control.
The plane was cleared to resume service in the U.S. and elsewhere after 18 months on the ground, but China has not yet recertified the aircraft. There have been reports in recent months to suggest China, the world's largest aviation market in terms of new plane orders, is nearing approval of the MAX, but geopolitical tensions between the U.S. and China have led to uncertainty.
On Monday morning, a Boeing 737 MAX flown by MIAT Mongolian Airlines landed in Guangzhou, China, according to flight trackers, marking what appears to be the first commercial 737 MAX flight over Chinese airspace since the March 2019 grounding.
A foreign carrier flying the 737 MAX is separate from Chinese airlines operating the plane, but was viewed by the markets as a step in the right direction.
Boeing did not offer much commentary on the flight, saying in an emailed statement the company continues "to work with global regulators and our customers to safely return the 737 MAX to service worldwide." That caution seems justified. This is a step in the right direction, but only one step.
The assumption remains that the MAX will eventually be cleared to return to service. It's the timing that is uncertain. And with Chinese airlines slowing capacity growth due to COVID-related restrictions and a slowing economy, there is less urgency now to add new planes to the fleet.
Boeing has its work cut out for it as it tries to resume normal delivery schedules post-pandemic. A reopening in China would help, but the aerospace giant faces a multiyear recovery and continued uncertainty about the health of the global economy. All this means there's no reason for investors to rush in and chase this rally.