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Boeing’s newest plane is also its biggest headache

Boeing’s newest plane is also its biggest headache

Last week, Boeing introduced the latest version of its venerable 737 airliner called the MAX 9.

With a range of more than 4,000 miles and room for 220 passengers, the MAX 9 is the second and largest variant of Boeing’s next generation 737 MAX aircraft family to roll out of its Renton, Washington plant.

However, for all of the MAX 9′s capabilities, it’s become a major headache for Boeing Commercial Airplanes.

Why? Because the MAX 9, for lack of a better word, is getting its butt kicked by by the Airbus A321neo or “new engine option.”

Even though the 737 MAX is the fastest-selling plane in Boeing history, only a small percentage of the 3,621 orders the company has taken have been for the MAX 9.

In fact, with 1,384 orders, the A321neo is currently out-selling the MAX9 at a rate of five planes to one.

“We pretty much own the middle-of-the-market now with the A321neo as a replacement for the Boeing 757-200,” Airbus Americas chairman Allan McArtor told Business Insider in a recent interview.

(A middle-of-the-market plane is an aircraft with 200 to 250 seats that slots in between short/medium-range single-aisle jets and smaller widebody models like the Boeing 787 Dreamliner.)

The Boeing 737 MAX 9 is by no means a bad airplane. In fact, it’s objectively good. The MAX 9 features the latest avionics, upgraded aerodynamics, powerful new engines, and is expected to be 25% more fuel efficient than the 757-200.

Unfortunately, for the MAX 9, the A321neo has struck a nerve with customers looking for a larger aircraft without the added costs of a wide-body jet.

The extended range variant of the A321neo — called the LR — with a claimed range of around 4,600 miles has become particularly popular with airlines looking to replace aging 757-200 fleets and for low-cost carriers looking for an affordable way to reach long-haul markets.

Boeing knows this is a problem.

Which is why one day before the MAX 9′s introduction on March 7, Boeing vice president of marketing, Randy Tinseth revealed the first images of an even larger model called the 737 MAX 10X at an industry conference in San Diego.

The MAX 10X takes the existing MAX 9 and stretches the fuselage by 66 inches — allowing Boeing to match the A321neo’s capacity while offering greater range at lower costs. In addition, Boeing claims the MAX 10X will have the lowest per seat costs of any single-aisle airliner in history — giving its operators a better chance at profitability.

With that said, the MAX 10X, expected to arrive by 2020, still can’t match the A321neo LR’s range, which it achieves by adding extra fuel tanks, thereby sacrificing cargo capacity.

But really, neither the A321neo nor the 737MAX 10X are true replacements for the underappreciated Boeing 757-200. They simply can’t offer the same range, capacity, and performance of the old plane that went out of production in 2004.

To truly beat Airbus and produce a worthy successor to its 757, Boeing would probably have to abandon its strategy of stretching the 737 airframe that debuted more than five decades ago as a short-range regional jet. And rumors of this made-from-scratch middle-of-the-market Boeing jet have been floating around the industry for several years now.

But McArtor, who served the administrator of the Federal Aviation Administration under President Reagan, doesn’t think Boeing will be in a position to do so.


“In my opinion, I don’t see any practical solution that Boeing has to counter what we have, ” the Airbus executive said. “And when I say practical, there is not a power plant that would justify developing an all-new airplane and the middle-of-the-market, although it’s a significant market, is just not large enough to justify multi-billion dollars worth of development work.”

But don’t think Airbus is sitting on its laurels. According to McArtor, the company is constantly tweaking its formula and working to improve the product. However, in terms of where the A321neo sits in the market, Airbus seems to be content with where they are.

“We feel pretty comfortable with where we are competitively with the 321,” McArtor said. “I think the marketplace is speaking for itself.”

The Renton, Washington-built Boeing 737 MAX 9 is expected to enter service in 2018. The Airbus A321neo made its first flight in February 2016 and is expected to be one of the aircraft models produced at the company’s Mobile, Alabama plant.

Get the latest Boeing stock price here. ( businessinsider)

 

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