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Boeing’s plan for bigger 737 MAX meets with industry doubts

The first of the large Boeing 737 MAX 9 models, Boeing’s newest commercial airplane, sits outside its production plant Tuesday in Renton, Wash. Boeing has already built 13 of the initial MAX 8 models, which are awaiting FAA certification and plans to deliver its first 737 MAX airplane by May. (Elaine Thompson / Associated Press)
By Dominic Gates The Seattle Times

Boeing said Monday it expects to launch a new larger variant of the 737 MAX family, the MAX 10, by year-end.

This latest chess move between Boeing and its great rival Airbus, which had been telegraphed for some time, aims at reducing Boeing’s growing lag in orders for the largest single-aisle jets. But there’s considerable skepticism in the industry that this new model will achieve that outcome.

Boeing vice president of marketing Randy Tinseth, speaking at the annual Americas conference of the International Society of Transport Aircraft Trading (ISTAT) in San Diego, said the planemaker has extended business offers to some airlines that are possible launch customers for the new jet.

The MAX 10 will fit into a segment of the market where the Airbus A321neo has been dominating against the 737 MAX 9.

As a result, Boeing’s new 737 MAX family trails well behind Airbus’s new A320neo family. With almost 1,400 orders for the A321neo alone, Airbus has a total of just over 5,000 neos ordered, compared to about 3,600 MAXs.

Though Boeing won’t break out its MAX sales by model, it’s clear the MAX 9 has sold poorly compared to the A321neo.

On the sidelines at ISTAT, Toby Bright, a former head of sales at Boeing and now chief executive of aircraft lessor Jackson Square Aviation, said the MAX 10 adds some confusion in the market for buyers like him.

Like most lessors, Bright said, he’s been hesitant to invest in the MAX 9 because it has a small customer base and lessors need to know that a large number of airlines will want a plane before they buy it to rent out.

And though Boeing says it expects to sell many more MAX 9s, now it’s offering the MAX 10, which is not very much bigger.

In designing the new jet, Boeing chose to do a minimal stretch of the MAX 9, because a longer stretch would have required more engineering changes at a much higher cost.

In two classes, a MAX 9 seats 178 passengers, while a MAX 10 should seat around 188.

“We think it will cut into the MAX 9 market, which is already relatively small,” Bright said.

He added that while the size of the customer base is the main consideration for aircraft lessors, that’s less important to individual airlines who may find the MAX 10 ideal for their route structure.

Still, lessors buy about 40 percent of the airplanes in the market.

Tinseth claimed the MAX 10 will seat as many passengers as the A321neo but will be much more efficient because it’s 2.8 tons lighter.

To illustrate the difference that much weight makes, Tinseth displayed a slide depicting a small elephant.

He has to hope such ploys will shift the message.

Interviewed at ISTAT, Adam Pilarski, vice president with aviation consulting firm Avitas, said the sales of the A321 against the MAX speak for themselves.

“As much as Boeing claims the A321 is not that good, they seem to be losing,” he said.

Airbus sales chief John Leahy, in his ISTAT presentation, disputed Tinseth’s figures and claimed the A321neo carries 10 more passengers than the MAX 10.

“I’m not worried,” Leahy said.