Boeing's biggest 737 Max jet takes flight

By Bloomberg News, April 14 2017
Boeing's biggest 737 Max jet takes flight

Boeing's newest and largest 737 Max gunned down the runway and soared over the shore of Lake Washington, south of Seattle, on its way to an almost three-hour maiden flight Thursday.

The latest model in Boeing’s best-selling jet family took wing five days ahead of schedule, during a week marking the 50th anniversary of the first 737 flight.

The single-aisle Max 9 faces an uncertain future, however, in a market dominated by the longer Airbus A321neo.

About three-quarters of orders for the workhorse planes favored by budget carriers are clustered around mid-sized models such as the Max 8 and A320neo. But sales are growing faster for larger narrow-bodies, one reason why Boeing is targeting Airbus’s lead with two stretched jets.

“It’s an incredibly important part of our family moving forward,” Randy Tinseth, a Boeing vice president of marketing, said of the Max 9.

Boeing has also begun marketing an even larger model, the Max 10X, and expects the two variants combined to eventually account for about a quarter of its narrow-body sales, he told reporters.

Balancing act

The U.S. planemaker is trying to pull off a balancing act with the 737, its largest source of profit. Boeing is mulling introducing as many as five Max models targeting different niches, while ratcheting up the tempo in its Renton, Washington, factory over each of the next three years.

Any stumbles in developing the new jets, a process fraught with delays, could damage Boeing’s bottom line if snarls slow manufacturing at a plant preparing to increase output to 47 planes a month in May – five more than the present rate.

The Max 8, the first of the upgraded 737 models, has completed flight-testing and is slated to begin deliveries in May, months earlier than initially planned.

Also read: Virgin Australia pushes back on Boeing 737 Max 8 deliveries

The first Max 9 took to the skies with Captain Christine Walsh in command. It is designed to seat 178 travelers in a two-class cabin, about 16 more people than the Max 8, while flying the same distance: as many as 3,515 nautical miles.

Also read: Boeing 797 will be a mid-sized mass-market jetliner

Boeing to the Max

The debut is the latest in a year crammed with new planes produced by manufacturers from Brazil to Ukraine. Boeing has already begun to cut metal for the next 737, the smaller Max 7.

Meanwhile the company’s 787-10, the largest Dreamliner, took its first flight March 31 – the same day that Airbus’s A319neo and Antonov’s An-132D turboprop aircraft made their maiden flights.

Sputtering airplane sales raise concerns that the new aircraft are entering the market as the aerospace industry heads into a downturn after more than a decade of growth. That could make it tougher for manufacturers to recapture the billions of dollars poured into engineering, tooling and factories.

The pain won’t be felt equally, however. Boeing and Airbus are cushioned by record backlogs for their upgraded narrow-bodies: 3,703 orders for the 737 Max and 5,056 sales for the A320neo lineup.

“This is why we have a duopoly,” said aerospace analyst Richard Aboulafia, referring to Boeing and Airbus. “Newcomers have a harder time with an ultimately cyclical market, combined with heavy spending on new-product development.”

Pioneer jet

Boeing shouldn’t have any problem recovering its costs for the 737 Max family, the latest versions of the venerable single-aisle jet that revolutionized low-cost travel and aircraft manufacturing with its moving line.

The bulk of Boeing’s orders are said to be for the -8, which seats more travelers than the A320neo, although the U.S. planemaker doesn’t break out sales by Max model.

With the Max 9 struggling to gain sales, Boeing has begun pushing the Max 10X, a longer model. It would seat about 230 travelers in a single cabin and cruise on transcontinental routes flown by Boeing’s 757, which has been out of production for more than a decade.

But potential customers, including Air Lease Corp., fret that the new model will get to market too late, with a planned 2020 debut. That will be a year after Airbus will introduce an A321neo model configured to seat as many as 240 people. Boeing would probably have to discount heavily to cut into Airbus’s lead, Aboulafia said.

Pricing power

“They can’t seem to get the pricing power they had with the NG series,” the analyst said, referring to the previous generation of the 737s that commanded premiums to Airbus jets. “Maybe that will change. But if it does, it will happen on the Max 8.”

But Boeing, for now, may be content to have product offerings that it can hone for 737 operators – without ceding the top end of the narrow-body market to Airbus, said Ken Herbert, an analyst at Canaccord Genuity.

“The investments haven’t been excessive relative to the broader program,” he said. The Max 9 and 10X will help “keep Airbus pricing in check,” he said. “Part of the benefit is just having something in place and letting the technology mature.”

Airbus is falling into the same trap as Boeing did with the 737, believing they have a good product. There is a huge gap that the 757/767 filled that either the A321 or A330-200 cant really fill. Unless they join the party and build a new aircraft there will be a gap that Boeing can jump into with the 797 all on their own.

The 10 as an old design is pure stupidity or worry about investing billions of $

31 Mar 2016

Total posts 622


"Airbus is falling into the same trap as Boeing did with the 737, believing they have a good product."
Pretty difficult not to believe Airbus do hv a good nex-gen product for that middle-of-the-mkt space(i.e. roughly where the old-gen 757/767 sit) when we look @ the mkt facts:
1. Nearly 1,400 frames of 321Neo/LR hv been sold in just a little over 6yrs.....that's way more than the entire 757 production run across 23yrs.
2. When 321Neo/LR outsold its only nex-gen direct competitor, the Max9, by a margin of @ least 3:1.

Agree 321Neo/LR cannot fully fill the upper end of that middle-of-the-mkt space but sales data are showing it is clearly covering a large chunk of the lower end.

"..a gap that Boeing can jump into with the 797 all on their own."
Boeing can but there are quite a few difficult technical-econ hurdles to overcome before the 797X concept becomes viable in the mkt:
1. According to a few of the largest potential customers which Boeing has already shown the 797X concept, it's a small widebody very similar in specs/scale to the 762(Debuted 25yrs ago).
2. Enormous diff in development+production cost for any widebody design vs for any narrowbody design.  $ cost difference becomes even sharper when comparing a clean-sheet widebody design(e.g. 797X) vs a derivative of an existing narrowbody platform(e.g. 321Neo /Max9). 
3. Most potential customers interested in that middle-of-the-mkt space expect 797X pricing to be closer to 321Neo /321LR /Max9 than to 332 /338 /788.

"The 10 as an old design..."
If the Max10X can be considered "an old design", then by the same criteria, the 330Neo still in development today is not much younger and pretty old too.

The original 737 1st flew in 1967 while the A300 1st flew just 5yrs later in 1972.  Like how the original 737 is connected to today's 737Max, the 330Neo shares the same basic platform design with the A300 fm 1972.

".. is pure stupidity"
On the other hand, may be even more stupid for Boeing to leave existing loyal customers of 737 family with no choice but to buy 321Neo(Exactly happened @ KoreanAir which was a pure 737 family operator) if they must hv something larger than the Max9 but the same size as the 321Neo?  Probably even ultimate stupidity when the Max10X will be such an obviously cheap+simple to develop product solution(estimated to hv 95%+ commonality with the Max9) to @ least slow down 321Neo sales to the existing 737 family customer base?

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