Boeing 737 MAX: Turning A Crisis Into A Win


  • Despite crisis, some airlines could be interested in ordering the Boeing 737 MAX at low prices.
  • Combination of low demand and Boeing 737 MAX crisis could aid Boeing winning orders.
  • Regulators seem to be aligned, and the market won't remain depressed, so airlines could be getting a long-life asset at crisis prices.
  • I do much more than just articles at The Aerospace Forum: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

Boeing (NYSE:BA) has been progressing on the recertification timeline for the Boeing 737 MAX. We are still quite a few steps away from recertification, but the main positives are that various regulators have performed evaluation flights, and they are much more aligned in their assessment, meaning that you could say there is a consensus, and also, Boeing has been more cooperative in taking some of the obvious steps needed to get the Boeing 737 MAX back in the air.

Boeing 737 MAX: Turning A Crisis Into A Win

Source: Aviation Pros

On the 30th of September, FAA administrator Steve Dickson piloted the aircraft, which can be seen as a sign of confidence in the work Boeing and the FAA have performed. It doesn’t clear the Boeing 737 MAX for flight, and Dickson does have some suggestions to Boeing before the aircraft goes through the final review.

However, things are looking much better, and barring any new issues, I believe the Boeing 737 MAX will indeed be back soon in a way that is safe for the flying public and crews. The big question at this stage is “who will buy this aircraft?”. In this analysis, we have a look at some potential customers.

Why buy a MAX now?

The header of this section is a question that should first be answered before we look which airlines might be on the shortlist for buying the Boeing 737 MAX. So, currently, demand for air travel is down the drain or in other words, “there is no air travel demand-driven incentive to purchase new aircraft”, and I believe that is where the opportunity arises. There is a low demand environment, and Boeing has over 400 Boeing 737 MAX jets sitting in storage, some of which do not have a customer. So, there is an imbalance between supply and demand that exerts a big pricing pressure on aircraft, and that pressure is even bigger

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This article was written by

Dhierin Bechai profile picture
In-depth insights from an expert on the aerospace and airline industries
Dhierin is a leading contributor covering the aerospace industry on Seeking Alpha and the founder of The Aerospace Forum. With his Aerospace Engineering background he has a more indepth knowledge about aerospace products enabling him to cover a complex niche. Most of his reports will be about companies in the aerospace industry or airlines industry, comparing products and looking at market forecasts providing investors with unique and thorough insights. Dhierin has accumulated nearly 20 million views never failing to spark healthy and thoughtful discussions for investors and aerospace professionals.

His reports have been cited by CNBC, the Puget Sound Business Journal, the Wichita Business Journal and National Public Radio. His expertise is also leveraged in Luchtvaartnieuws Magazine, the biggest aviation magazine in the Benelux.

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Disclosure: I am/we are long BA, EADSF. 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.

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