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Introduction

Jan. 11, 2018, © Leeham Co.: The decision last week by Southwest Airlines to defer for four years delivery of 23 of 30 Boeing 737-7 MAXes does not bode well for this sub-type.

Concurrently, Southwest exercised options for 40 of the larger 737-8.

One of only four identified customers for the 7 MAX, with the largest order of 30, LNC considers it highly likely that a good portion of the 23 remaining orders will be

Boeing 737-7.

converted to the 8 MAX.

With only 63 identified 7 MAX orders, the aircraft risks becoming a narrowly purchased niche aircraft.

Summary

• Despite Boeing claiming in a trade complaint the 737-7 has a good future if Bombardier’s C Series is subject to 292% in tariffs, the airplane seems destined to be no more than a niche airplane with airlines.
• The largest customer for the 7 MAX is up-gauging.
• The 7 MAX future appears to be with business jets and military transports.