Aug. 14, 2017, © Leeham Co.: Avolon, one of the world’s largest aircraft lessors following the acquisition of the CIT Aerospace portfolio, believes Boeing will see 2,000 of the 737-10—doubling the internal figure Boeing used to launch the program.
In a new white paper, which Avolon periodically issues, the lessor “projects that the MAX 10 will account for approximately 20% of all 737 MAX family deliveries, which would equate to around 2,000 aircraft. This compares to the A321neo, which is forecast to account for 40% of the A320neo family, with over 4,000 deliveries,” writes Steve Mason, Avolon’s SVP of Strategy.
Mason joined Avolon from CIT acquisition, where he held a similar position and likewise issued periodic white papers.
“The value proposition of the MAX 9 has been impacted by the launch of the MAX 10. It is unclear what role remains for the aircraft, but it is likely to have a limited future,” Mason writes.
The white paper, The 737 MAX Takes Flight, a Product Assessment, which is available on the lessor’s website, has a plethora of data that succinctly puts in one location statistics that those who compare Airbus and Boeing claims will like to have.
For example, the number of operators with in-service, orders and option/LOIs for the 737NG, 737 MAX, A320ceo and A320neo families are shown. Airbus is comfortably ahead in many categories.
Lessors, which prize aircraft “liquidity” and a broad customer base, overall have more Airbuses on order than Boeings in the neo v MAX sector.
Poor-performing models in the 737-7, 737-8-200 and 737-9 hurt Boeing, Mason writes. Airbus only has the poor-performing A319neo (Mason does not break out the A321LR).
From a lessor’s standpoint, only the 737-8 gets a green color, Mason writes. The MAX 7 and MAX 9 are red while the MAX 200 and MAX 10 are orange.
“Even before the launch of the MAX 10, the market’s reception to the MAX 9 was lukewarm. United Airlines decision to convert orders for 100 MAX 9s to the MAX 10 demonstrates the aircraft’s vulnerability,” Mason writes. “It will no longer serve as the lowest unit cost family member and whilst airfield performance is expected to be superior to the MAX 10, it is inferior to the MAX 8.
“The A321ceo has attracted five times the number of operators as the 737- 900ER. The A321neo is maintaining that advantage with five times the number of announced operators as the MAX 9. Appraisers assign a higher value to an A321ceo over a 737-900ER despite the 737-800 garnering a higher value than an A320ceo, based on the average of four appraisers. The MAX 9 incurs a significant operating cost per seat penalty when compared to the A321neo, particularly with Airbus’ 240 seat configuration. This difference, almost 7%, is untenable and ultimately led to the launch of the MAX 10.”