Boeing 737 (MAX) news

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RoMax
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Boeing 737 (MAX) news

Post by RoMax » 19 Jul 2012, 21:39

As already several news topics about airline programs like the A350, A380, 787/748 and A320 exist, I think it would be right to start a news topic of the 737MAX too.

To start with, not real news, but strong rumours. Aeromexico and Copa Airlines are said to be almost ready to announce 737MAX orders. Aeromexico will combine this with a 787-9 order. Some weeks ago Aeromexico confirmed that they were about to take a decision between the A320NEO and the 737MAX and for a new long haul aircraft, a possible order of 70 aircraft in total. According to "insiders" the decions has fallen on Boeing and they will soon announce the order.
Copa is no suprise, already days after Boeing announced the 737MAX, Copa said they were very interested. Probably their order was already included in the booked commitments?

Also GOL is set to place a (big) order for the 737MAX. According to insiders Airbus did a lot to get GOL at their side (they currently use only Boeing's), but Boeing tried harder to keep them.

Earlier this month Airbus accused Boeing that they started a price war to sell the 737. Tough official numbers show Boeing is having much higher profit margins and return on investment as Airbus (or EADS in whole). This allows Boeing to offer higher reductions, tough Boeing still makes huge profits with the orders.
Tough this is typical for Airbus and Boeing. They accuse the other of things they do theirself. Two big exemples of huge discounts: RYR got HUGE discounts on their 737 orders, tough the latest dates back already from 2007 after that Boeing didn't agree anymore with the demands of RYR and easyJet got HUGE discounts on their initial A319 orders to steal them away from Boeing (as they were using the 737-700 back then). Just business as usual, even with the huge discounts (even up to 60%...) both Airbus and Boeing book huge profits.

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Re: Boeing 737 (MAX) news

Post by earthman » 23 Jul 2012, 15:17

So who are the poor schmucks who overpay for their new planes? And what are the huge profits used for? This doesn't seem like a very healthy market.

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Re: Boeing 737 (MAX) news

Post by RoMax » 23 Jul 2012, 15:35

The bigger the order, the bigger the discounts, the bigger the importance of the client (for exemple stealing a huge 737-customer (partly) away to buy the A320 or the other way around), the bigger the discounts, the bigger the client (it may be a 'small' order, but when it's an airline that books a lot of small orders for one airframer...), the bigger the discounts,... Usually it are the smaller airlines that pay 'too much' for their aircraft (in which case it's better to just lease them instead of buying). They don't have the 'power' to negotiate for huge discounts.

If you look at Boeing's first quarter results things are clear (tough this also includes their defence departments): 923 million dollar profit, 8.1% operating margin, backlog rose to 380 billion dollar in total (42 billion dollar was added in the first quarter by new sales of commercial aircraft), 10.5 billion dollar available cash and available credits, ...
EADS earned 133 million euro's (169 million dollar) in the first quarter, so a lot less as Boeing, but still nothing to cry about (in the first quarter of 2011 they lost money).

So it seems Boeing and Airbus can both afford it to offer huge discounts, and Boeing can afford themself a little more.

But ahum...this was intended as the 737 (MAX) news topic :mrgreen:

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Re: Boeing 737 (MAX) news

Post by RoMax » 03 Aug 2012, 14:49

Silk Air (Singapore) signed an agreement with Boeing for 23 Boeing 737-800's and 31 Boeing 737 MAX 8's and another 14 options.
Deliveries begin in 2014 and will end in 2021.

Silk Air currently has a fleet of 21 Airbus A319's and A320's (+ 3 A320's due for delivery by the end of 2013). The new Boeing order will be both for replacement and expansion.

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Re: Boeing 737 (MAX) news

Post by earthman » 03 Aug 2012, 15:38

Any insights why they switched to Boeing?

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Re: Boeing 737 (MAX) news

Post by RoMax » 03 Aug 2012, 15:49

Xiamen Airlines also signed for 40 Boeing 737's (type isn't mentioned) for delivery between 2016 and 2019.

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Re: Boeing 737 (MAX) news

Post by RoMax » 03 Aug 2012, 15:52

earthman wrote:Any insights why they switched to Boeing?
The price maybe? Airbus has a much bigger marketshare in Asia (in the A320/737 market), I assume Boeing is willing to reduce their prices to steal an Airbus-customer. As previously said, Boeing still makes more profit and still has larger margins than Airbus-EADS, so Boeing can afford it to offer bigger discounts on the already cheaper 737 and still make about the same amount of money on it.
For airlines where the difference in the A320 and 737 isn't so big for them, that may be the final factor in the decision.

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Re: Boeing 737 (MAX) news

Post by sn26567 » 03 Aug 2012, 16:17

Silk Air made a commitment to Boeing, not a firm order yet. It is likely to result in a firm order, but in the meantime Airbus can try to retaliate or make a better offer.
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Re: Boeing 737 (MAX) news

Post by RoMax » 03 Aug 2012, 16:22

sn26567 wrote:Silk Air made a commitment to Boeing, not a firm order yet. It is likely to result in a firm order, but in the meantime Airbus can try to retaliate or make a better offer.
Yes that's why I said they "signed an agreement" otherwise I would say somthing like "SilkAir placed an order for...". ;)

But once a LoI is signed, it's very unlikely the order will still go to the other airframer... Especially when the order is decided on the final price...Boeing is difficult to beat in discounting (something Airbus made clear in the press by accusing Boeing of a real price war on the 737).
Last edited by RoMax on 03 Aug 2012, 16:30, edited 1 time in total.

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Re: Boeing 737 (MAX) news

Post by sn26567 » 03 Aug 2012, 16:28

Picture of the 737MAX in Silk Air colours:

Image
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Re: Boeing 737 (MAX) news

Post by sn26567 » 03 Aug 2012, 18:28

MR_Boeing wrote:
earthman wrote:Any insights why they switched to Boeing?
The price maybe? Airbus has a much bigger marketshare in Asia (in the A320/737 market), I assume Boeing is willing to reduce their prices to steal an Airbus-customer.
Indeed! "We have no comment to make on the purchase decision by Silkair. However, Boeing has clearly made an extremely aggressive offer to win this deal in an attempt to catch up with the huge success worldwide of the A320 family," said Airbus spokesman Stefan Schaffrath.

Latest order for Boeing leaves Airbus fuming

Planemaker Airbus was left reeling Friday as a high-profile customer defected to Boeing, prompting European accusations of aggressive tactics amid renewed evidence of a jet price war.

More comments from The Chicago Tribune: http://www.chicagotribune.com/business/ ... ?track=rss
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Re: Boeing 737 (MAX) news

Post by PYX » 03 Aug 2012, 18:59

sn26567 wrote:...Planemaker Airbus was left reeling Friday as a high-profile customer defected to Boeing, prompting European accusations of aggressive tactics amid renewed evidence of a jet price war...
Karma.
What goes around, comes around.

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Re: Boeing 737 (MAX) news

Post by RoMax » 12 Oct 2012, 14:35

This week Alaska Airlines confirmed an order for another 50 Boeing 737's (not such a suprise, but anyway the largest Alaska Airlines order ever).
They placed orders for 20 MAX 8's, 17 MAX 9's and 13 for the current -900ER (also this aircraft is increasingly popular, already got several big orders in the latest two years, and about the MAX series; the MAX 9 seems to become more popular as the MAX 7, in NG series it's the other way around).

This brings the total firm orders for the 737 MAX to 858 aircraft. But still several MoU's have to be confirmed, like a huge Aeromexico order, some orders from leasing companies,... (what doesn't mean the A320neo is still several big orders in front of Boeing)

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Re: Boeing 737 (MAX) news

Post by RoMax » 15 Nov 2012, 16:30

Silkair now firmed the order with Boeing for 54 737's (23 -800's and 31 of the MAX8).
This order is worth 4,9 billion dollar, but of course they'll pay a much lower amount (probably just 60-45%...). But even with these huge reductions, Boeing can still make money with them (unless they fuck up the production like with the 787). And SilkAir is an airline you would really like to have, succesfull and growing.

It's been the other way around many times before. Remember the start up of JetBlue Airways at the end of past century? In their business plan the Boeing 737-800 was the prefered aircraft. But Boeing had difficulties to deliver them fast enough in the early days of the 737NG and didn't want to drop their prices too much for a new, uncertain airline. Airbus got away with the order after dropping their price offer, with a new succesfull and long term client of the A320-family as result.

Anyway this new order of Silkair also completed a new record for Boeing. Thanks to this order they sold already 1,031 737's this year (net orders), this is the first time Boeing succeeds in selling more than 1,000 of one aircraft family in just one year.
Thanks to the 737MAX and the taking up of the 787 and 748 production, Boeing will be the world's biggest civil aircraft company, both on the amount of orders as on the amount of deliveries. The previous time Boeing got more orders (and also the last time they got more than 1000 orders in one year) than Airbus, was in 2007. Based on deliveries Airbus was on the first place since 2003. Their A320 production is still way above that of the 737, but Boeing delivers much more widebodies.

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Re: Boeing 737 (MAX) news

Post by sn26567 » 15 Nov 2012, 19:10

It is quite normal that Boeing is selling more 737 MAX aircraft this year than Airbus is selling A320 NEOs. After all, Airbus was one year earlier on the market and made a large part of its sales last year. And still now Airbus has more orders for its new single-aisle aircraft than Boeing.

It will be interesting to see how many both aircraft manufacturers will sell next year, when the novelty of the aeroplanes will have settled. And also interesting will be to see the performances of these new aircraft. On paper, everything looks good, but the real test will be in the air.
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Re: Boeing 737 (MAX) news

Post by RoMax » 15 Nov 2012, 19:23

sn26567 wrote:It is quite normal that Boeing is selling more 737 MAX aircraft this year than Airbus is selling A320 NEOs. After all, Airbus was one year earlier on the market and made a large part of its sales last year. And still now Airbus has more orders for its new single-aisle aircraft than Boeing.
Of course, I didn't claim it was 'special' is it? Just that's it's a Boeing-record and that it's the first time Boeing sells more aircraft than Airbus since quite some time (Airbus has been in the lead position for the narrowbodies for years, Boeing for widebodies, but this year, thanks to the 737MAX they're also in the lead position of the narrowbodies: if you read my posts of early 2012/late 2011 you would already see this is exactly as 'planned' for the exact reasons you give)
Still Boeing is the biggest airframer this year again, not just based on orders (that varies much more often), but based on deliveries and that's what I wanted to make clear, they lost this position almost a decade ago.

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Re: Boeing 737 (MAX) news

Post by sn26567 » 15 Nov 2012, 22:27

It seems that Boeing will employ eight flight test aircraft for 737 MAX certification, four -8s, two -7s and two -9s. This looks like a record high number.
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Re: Boeing 737 (MAX) news

Post by RoMax » 15 Nov 2012, 23:33

sn26567 wrote:It seems that Boeing will employ eight flight test aircraft for 737 MAX certification, four -8s, two -7s and two -9s. This looks like a record high number.
I assume this is to seriously reduce the time needed for certification. Many of these test aircraft may be sold eventualy as well (just as with some 787's and most 748 test aircraft). It was planned Boeing would sell all 6 787-8 test aircraft, but this plan was worthless eventually as the early 787's had no commercial value anymore (too heavy, too many changes, not even all changes documented in the way needed for commercial service,...), but anyway, that's not like it should be and I suppose Boeing has the ambition to do things better with the 737MAX.

Btw, 6 test aircraft for the 787-8 and another 4 for the 787-9 isn't quite a low number either, even tough we are talking about widebodies here. If the 787-10 gets launched that will probably mean another 2-4 test aircraft (I assume less than with the 787-9 as it's basicly a simple stretch of the 787-9, while the -8 and -9 have many more differences, but still more than 1 as this wouldn't be enough for a fast certification)

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Re: Boeing 737 (MAX) news

Post by earthman » 16 Nov 2012, 17:56

Uh but Boeing can only make like 500 737s per year (target is 42/month in 2014). If they keep selling at this rate, they need to double their production capacity.

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Re: Boeing 737 (MAX) news

Post by sn26567 » 17 Nov 2012, 00:07

earthman wrote:Uh but Boeing can only make like 500 737s per year (target is 42/month in 2014). If they keep selling at this rate, they need to double their production capacity.
Yes, therefore, they intend to build a third assembly line for the 737.
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