American Airlines’ Surprising Order of Uncertified Boeing 737 Max 10 Jet: A New Lease of Life for the Troubled Aircraft maker?
Boeing, the leading aircraft manufacturing company, experienced a revival in its commercial jet orders during March 2023. However, this surge was not driven by organic demand but rather resulted from a substantial order placed by American Airlines for the Boeing 737 Max 10 – a variant of the aircraft that has yet to receive approval from the Federal Aviation Administration (FAA) for passenger service.
American Airlines’ Decisive Move:
The Dallas-based carrier made headlines when it announced orders for 85 new Boeing 737 Max 10 planes, making it the largest order for this model to date. Furthermore, the airline converted earlier orders for 30 737 Max 8 jets into additional Max 10 orders, with options to purchase an extra 75 units in the future. This significant order was disclosed in Boeing’s March and first-quarter sales report, revealing no other orders for any 737 Max versions during the month. Apart from American’s large Max order, Boeing secured orders for 28 widebody 777 jets in March as well.
A Halted Certification Process:
The certification process for the Boeing 737 Max 10, initially slated to begin passenger service this year, has faced a setback following a door plug incident on an Alaska Airlines flight in January. The event necessitated Boeing to seek a waiver from the FAA for the Max 10 and a smaller Max 7 model’s certification due to concerns regarding anti-icing equipment on the Max engines. However, the controversy surrounding Boeing’s safety record and quality controls after this incident led the company to withdraw its request for a waiver, thereby stalling the certification process temporarily.
Impact on Competitors:
United Airlines, a significant competitor to American, had earlier ordered 737 Max 10 jets from Boeing but expressed concerns following the Alaska Air incident. United CEO Scott Kirby announced that his airline would no longer count on these planes and was considering purchasing competing aircraft from Boeing rival, Airbus, instead. However, with a substantial backlog of orders at Airbus, United might face considerable delays in acquiring new planes from the contact aircraft maker.
Boeing’s Rollercoaster Ride:
Prior to the Alaska Air incident, Boeing reported a record month for commercial jet orders in December 2022. The strong sales momentum carried on into the year, positioning Boeing for an impressive overall sales performance. However, following the January incident, orders came to a virtual standstill, resulting in Boeing’s worst month for orders since the pandemic. Despite reporting 15 new orders in February 2023, this number was significantly below Boeing’s typical monthly order volume.
A Vote of Confidence:
American Airlines’ decision to order the uncertified 737 Max 10 planes, even in the face of uncertainty surrounding the aircraft’s approval, is an essential vote of confidence for Boeing. Though orders before certification are not uncommon in the aerospace industry, they typically occur when there is clarity regarding the plane’s eventual clearance for passenger service. This significant order from American Airlines provides Boeing with some much-needed reassurance as it navigates the challenging certification process and production delays caused by the Alaska Air incident.
Boeing’s Delivery Struggles:
In March 2023, Boeing delivered only 29 jets – 24 737 Max and five 787 Dreamliners. The company’s production has been affected by the ongoing questions about its quality controls, resulting in a lack of deliveries that has created problems for some of its airline clients. United Airlines, for instance, has put a hiring freeze on pilots and asked some pilots to take voluntary unpaid leave due to Boeing cutting 737 Max deliveries by roughly 40%.
Southwest Airlines’ Response:
In response to the reduced 737 Max deliveries from Boeing, Southwest Airlines announced that it would bring on 50% fewer pilots and 60% fewer flight attendants than planned this year. The airline attributed these reductions to Boeing cutting Max deliveries to the carrier by about 40%.
In conclusion, American Airlines’ unexpected order of uncertified Boeing 737 Max 10 jets offers a significant boost to the troubled aircraft maker amidst production delays and certification concerns. This order serves as an essential vote of confidence for Boeing, signaling that there is still demand for its products despite the challenges it currently faces. However, the timeline for FAA certification and subsequent delivery remains uncertain, potentially causing further complications for Boeing and its airline clients.
