China's aviation regulator released an airworthiness order for the Boeing 737 MAX on Thursday, clearing the path for the model's return to service in the country after more than two and a half years, sparking a rise in the planemaker's stock.
The instruction directs airline operators on the modifications that must be made before the MAX can hit the skies, although it does not specify when China will lift its MAX ban in Chinese airspace.
Boeing Co. praised the decision as a "significant milestone" to resuming service in China, and its shares closed 7.5% higher, propelling the Dow Jones index to a 1.72% rise, its largest one-day percentage increase since March.
The Civil Aviation Administration of China did not immediately respond to a request for comment from Reuters regarding the following measures required before the MAX may resume service.
The CAAC, which was the first regulator globally to stop the MAX in March 2019 following two fatal incidents, announced that it has finished an assessment of Boeing's proposed design improvements.
"Following a thorough examination, CAAC determines that the corrective efforts are sufficient to resolve this hazardous condition," the regulator stated on its website.
"The CAAC's decision is a critical step toward safely reintroducing the 737 MAX into China's airspace," Boeing said on Thursday. "Boeing continues to work with authorities and customers to restore service to the airplane globally."
Prior to the grounding of the 737 MAX, Boeing sold 25% of the planes it made each year to Chinese buyers, its largest customer.
The agency solicited input from the industry last month prior to publishing the airworthiness regulation.
It previously specified three principles for the aircraft's reintroduction to service in China, including certified design improvements, competent pilot training, and precise and conclusive findings regarding the two Indonesian and Ethiopian tragedies.
Boeing Chief Executive Officer David David Calhoun said in October that the company was seeking to obtain Chinese clearances for the 737 MAX to fly by the end of the year, with deliveries set to restart in the first quarter of 2022.
Around a third of the approximately 370 737 MAX aircraft in storage are destined for Chinese clients, Boeing stated at the time.
China's approval of the 737 MAX is extremely positive news, as it will aid in the drawdown of unsold MAX inventory, Safran CEO Olivier Andries told reporters on Thursday.
Safran manufactures MAX engines as part of the CFM International partnership with General Electric Co.