09 Jul 2020
Posted in Aerospace, Defense & Security
B737 MAX’s troubles could extend far beyond current COVID-19 crisis
Following the recent news that Avolon has canceled an additional order of 27 B737 MAX;
Nicolas Jouan, Aerospace and Defense Analyst at GlobalData, a leading data and analytics company, offers his view on the situation:
“Bad news appears to come unabated since the beginning of the year for Boeing’s B737 MAX. After the deferral of 68 B737 MAX from leasing company SMBC Aviation Capital last month, Avolon announced the cancelation of an additional 27, adding to 75 previous cancelations announced last April. While Boeing is still formally planning on a return to flight this year for the fuel-efficient version of its bestselling narrow-body, its B737 order book is shrinking at a dangerous pace, suggesting that the MAX’s troubles could extend far beyond the current COVID-19 crisis that has wiped out air travel in the past few months.
“The pandemic appears to be the reason for cancelations and deferrals, at least formally. For instance, SMBC declared that the deferral would extend until 2025, which is a reasonable timeframe to assess the true long term impact of COVID-19 on commercial aviation. However, while COVID-19 has certainly had a profound impact on MAX’s troubles, it is not the sole cause as companies such as Air Canada or Air Lease Corporation canceled orders in massive proportions earlier this year without even directly invoking COVID-19 disruptions. It is becoming increasingly likely that we will see a FAA recertification before the end of the year, but doubts remain regarding the potential of the MAX to preserve, let alone conquer, market shares in a shrinking commercial aviation industry.”