The Boeing (NYSE:BA) 737 MAX was announced in 2011 as the successor of the successful Boeing 737 NG and the main competitor for the Airbus (OTCPK:EADSF) A320neo. Deliveries will start in 2017, one year later than Airbus' neo.
The general story for the Boeing 737 MAX is that it is an airplane just like the 737NG, pushing the boundaries in its category. In this article I will mainly look in what aspects MAX differs from NG. Furthermore I will highlight some of the new features of the MAX.
To compare the NG and the MAX I will use the -8 version of each airplane.
Cruise speed in Mach [-]
Costs [$] in millions
As can be seen the general characteristics do differ a lot. The Boeing 737 MAX has a 4% higher MTOW (Maximum Take Off Weight), meaning that it is able to carry more fuel (No data available). This difference shows as well in the range, which is increased by 16%. The costs are 13% higher, but maintenance costs (for instance for the engines) are lower due to the extended life cycle.
Range increase was possible due to innovations on the following parts of the airplane, which I will also shortly discuss:
One of the biggest changes is the winglet design. The NG winglets consisted of 1 part only. The effect was a higher 'effective wing area'. Wings that don't have winglets produce vortices, which disturb air flow over a part of the wing (decrease lifting capability of the wing) and increase drag.
The conventional winglets already had the following effects:
- Increased climb performance, resulting in a lower required thrust setting.
- Lower thrust levels (-4%) at cruise
The effects above result in a lower stress on the engines, meaning that their life cycle is increased.
- Lower fuel burn (-4%)
- Increased range (+4.4%)
- Emission of NOx lowered by 5%
With the new winglet concept Boeing claims that fuel burn will be 1.5% more efficient than on the 737 NG, this would be due to the more equal lift distribution over the wing span thereby increasing the effective wing span.
One of the most important choices Boeing had to make is the engine diameter. After Boeing narrowed down the selection to 168 cm and 173 cm the company eventually chose for the 173 cm diameter engine. A 168 cm diameter would mean less drag, whereas a 173 cm engine meant a higher bypass ratio and thus a lower fuel burn. Eventually Boeing even increased the diameter for the LEAP-1B to 176 cm. The new engines should be 10%-13% more fuel efficient than the CFM56 engines on the NG. Carbon emissions are expected to drop by 13% as well. Boeing's prediction is that the 737MAX will even beat upcoming competitors in the market by 8%. Due to new production methods more efficient engines can be produced.
Additionally a production method was used that decreases the noise production of the engines. To reduce noise in the cabin the engines have a 'saw tooth' pattern near the exhaust (visible in the render below), an idea that comes directly from the development of the Boeing 787. These design changes result in a 40% smaller noise footprint.
A 3rd visual difference on the 737 MAX is the more streamlined 'aft body', also called tail cone. This change makes the vortex generators redundant. The net effect of this change is 1% less drag.
Fly-by wire spoilers
An additional weight saving feature on the MAX is the use of fly-by wire spoilers instead of the conventional heavier hydraulic spoiler system.
Passenger comfort is also increased on the Boeing 737 MAX, offering the new sky interior. Engine noise inside the cabin has been reduced by applying the saw tooth pattern on the engines.
Orders and financials
For investors the biggest question is how good the product will sell or is selling and what that will mean for the stock. Therefore it is worth to look at the order numbers for the Boeing 737 MAX. The Boeing 737 MAX comes in 3 variants: the -7, -8 and -9.
In order to see how successful the MAX series is, one has to look at the order numbers for the 737 Next Generation as well:
It can be seen that the 737 NG is a highly successful airplane with over 6000 orders, valued 543.5 billion dollars. Given that Boeing has a lot of customers for the NG, it can be expected that Boeing will get orders from these customers for the MAX version as well.
As can be seen the orders for the MAX are still about 5 times smaller than the orders for the NG series.
I expect order numbers for the MAX to grow due to the following reasons:
- The MAX and NG are very similar, meaning that changing from the NG to the MAX brings less costs (type ratings, maintenance costs) than switching from the NG to the 320neo.
- Additionally due to increased prosperity in China (China needs 5600 airplanes until 2032), Africa and South America the demand for passenger transport and for airplanes will grow in the coming years.
- The MAX will enter service in 2017, Boeing can expect orders to replace 737NGs that are at the end of their economic life cycle as well.
I think that the Boeing 737 MAX will contribute significantly to Boeing's growing order book and the goal to add to the existing market share.
When looking at the total value of the orders, one has to take into account that airlines get big discounts on ordering multiple aircraft of the same type.
With the introduction of the 737 MAX, Boeing succeeded in adding a new revolutionary airplane to its product line that pushes boundaries in its class. With tweaking, redesigning and using new production methods Boeing brings airlines an airplane that reduces stress on the environment and cuts costs, while maintaining a relative low price.
At this point it is hard to compare the MAX with its future competitors as most numbers are estimates and both the MAX and the A320neo have to see their first flight yet. Once flight tests have been conducted and commercial flight commences more performance diagrams and numbers will become available, which makes a comparison easier.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.