March 6, 2017, © Leeham Co.: Boeing rolls out its 737-9 MAX tomorrow.
Last week, I received a call from one of the network/cable news organizations asking, What’s special about this airplane?
The answer is: Nothing.
It’s a straight-forward re-engining of the 737-900ER, itself just a so-so airplane for which there were only 495 orders—a mere 7.45% of the NG sales. (It would be
slightly lower if I include the 737-800-based P8A Poseidon, which I don’t in these figures.)
Boeing doesn’t break out the MAX sales, saying customers can switch between models. But they could do this with the NG, too, and Boeing always broke out these figures.
However, LNC previously confirmed that at YE 2015 the MAX 9 had about 290 sales. Late last year, an aerospace analyst told me Boeing told him that the MAX 9 represented about 9% of the sales. This equates to about 325 aircraft. I think the number is probably, realistically about 100 more if the large order from Lion Air, characterized as MAX TBD, is allocated along the lines of its existing in-service and on-order NG fleet.
Be that as it may, here’s why there is nothing special about the MAX 9, any more than there was anything special about the -900ER.
The over-arching reason is that the -900ER only carries a few more passengers than the -800. There isn’t enough revenue-gain for the airplane’s extra cost.
Also: Field performance is poor. The take-off runs are longer than the -800/8 because the fuselage plugs mean the -900ER/9 can’t rotate as much as the smaller aircraft
Fuel economy and range of the -9 is better than the -900ER. But that’s about it.
And the market has spoken. Airbus sold 1,384 A321neos through January. It also sold 1,736 A321ceos through the lifetime of the program. Against about 325-425 MAX 9s, 495 -900ERs and 54 -900 Standards.
The 3:1 advantage to the A321ceo is consistent with the 3:1 advance of the neo vs the -9, using the 425 figure.
Boeing recognizes that Airbus has the better airplane in the A321neo, at least internally. (The public stance that the -9 is better simply isn’t credible, given the sales histories of both airplanes.)
This is why the MAX 10 is being developed. This brings capacity to within three to five passengers of the A321neo in standard two-class. (It falls 10 short in pack-‘em-in high- density, 230 to 240 pax.)
But the MAX 10 is being done on the cheap: a straight-forward stretch with fuselage plugs. No other substantive improvements. This means shorter range than the MAX 9 and a lot shorter range than the A321neo in its typical configuration using at least one Auxiliary tank.
Boeing hopes to prevent further defections to the A321neo from Boeing customers. It’s a band aid solution at best, and it doesn’t cover the wound.
Based on public information and LNC’s own market intelligence, market reaction to the MAX 10 is tepid at best.
Lessors we’ve talked with have zero interest in ordering the airplane. American Airlines, which has a large order for A321neos, has no reason to order the aircraft. We’re told United Airlines isn’t interested—it already has a large order for MAX 9s–but the company is still looking at the aircraft. An airplane with a few more seats adds fleet complexity.
Delta Air Lines doesn’t have any orders for either the Airbus NEO or the Boeing MAX. It’s highly unlikely Delta will take the plunge with the MAX 10, which offers nothing over the MAX 9 (and little over the -900ER operated and ordered by Delta) except more seats.
Alaska Airlines, which is under-ordered for the MAX compared with its long-term replacement needs for the NG, would be a natural potential customer. But with the acquisition of Virgin American, Alaska is preparing to “test drive” the A321neo VA is about to receive. Airbus is betting AS will like the airplane enough to retain the VA Airbus fleet, breaking the Boeing monopoly at AS.
Southwest Airlines, which never bought anything but Boeing, likely finds the MAX 10 too big. It takes too long for the turn-times.
The MAX 10 originally was conceived with the US market as the top priority. With American and Southwest out, United probably out, Delta a very long shot at best and Alaska in flux, Boeing needs to look outside the US for the best prospects.
China, Asia and now India all have been mentioned in news articles. One problem: field performance of the MAX 10 is a question mark. Boeing wants it to be no worse than the MAX 9. How’s that for a sales point?
I’ve said it before and I’ll say it again. Boeing should forget about the MAX 10 and go straight to designing a replacement for the 737. The MAX 7 has fewer than 70 announced sales, far, far worse than the -700NG (which is winding down at 1,128). The MAX 9 is doing little better than the -900ER.
Boeing won’t regain market share with the MAX 10. Yes, Boeing has more sales potential with existing 737 operators than Airbus has with existing A320 operators (because the ratio of new-to-old isn’t as high with Boeing as with Airbus). But some 737 operators may just decide to retain the NG fleets longer with the expectation Boeing will take the jump to a new airplane, rather than ordering an interim solution.
The only way Boeing will take the lead over Airbus is to launch an entirely new airplane. This resets the competitive clock to zero. Commonality, except for cockpits, won’t be an issue.
The 787/747-8 experience was costly and traumatic. But these are in the past.
It’s time for Boeing to be bold again.