By: Prem Mahendranathan
The future of Boeing 737MAX is at stake, as the world grounds the aircraft.
The worst news comes to Boeing as it has been strongly processing through more than 5,000 orders for MAX, worth around $57 billion.
Boeing invested only around $1.8 billion for the airframe remodelling from its predecessor 737, and with the development of engines cost around $2 to 3 billion.
More than the production cost, the reputation of Boeing’s technology is at stake at the time it is focusing on launching 777x and developing New Mid-Market Aircraft.
The 737 MAX series comes in four variants, in 138 to 230 seating capacity with a range of 3,215 to 3,825 nmi. The MAX was introduced as the replacement for 737-700, -800, and -900, respectively.
Airlines has been going though hard time, with Boeing 787s and with this new issues with MAX, they may switch the orders to Airbus A320 family aircraft which has the seating capacity of 180 to 189 to 240 passengers.
However, Airbus will not to be able to meet the demand, as it has a backlog of more than 5,800 firm orders for the A320neo family jets, as of 1 March 2019. Even Airbus increases the production rate as planned for 2021, it will build a maximum of 725 a year., means it would take eight years complete the backlog.
Will airbus take a risk on investing more money to increase the production rate?…I doubt it…