With demand for new narrowbodies unbroken, Boeing accelerates the 737 MAX schedule
The used to have a head start of more than two years on the competing MAX. But that advantage is now becoming smaller, as is bringing forward the introduction of all three versions of its new narrowbody by several months.
The initial 737-8 is now due for first delivery toward the beginning of the third quarter of 2017, rather than toward the end of the fourth. The 737-9 will follow 18 months later and in turn be followed by the -7 another 18 months later.
“Things are going so well,” Boeing Vice President and General Manager for Airplane Development Scott Fancher said at the Paris air show here June 19. According to Fancher, Boeing has long played with the idea of putting out the aircraft earlier. “We anticipated the opportunity to accelerate MAX from Day One,” he said.
Boeing is proceeding with the acceleration because the program has met development milestones with more ease than expected. The schedule change means the MAX is now likely to be less than two years behind the A320NEO, which is expected to enter service toward the end of the third quarter of 2015.
The MAX program has tallied more than 1,400 orders; the NEO had chalked up 2,245 as of June 19.
While Airbus secured orders for 135 NEOs fromhere last week, Boeing can be confident it will be able to soon firm up what could be an even larger commitment from fellow European low-fare carrier —CEO Michael O'Leary hopes to finalize a deal for more than 200 737 MAXs before year-end. “If it is not 200 plus, then it is not worth doing,” O'Leary said here. Ryanair expects talks on specifics of a potential deal to continue until the end of September before final negotiations are started.
Ryanair's anticipated MAX deal is preceded by an order for 175 Boeing 737-800s, which the airline firmed up following approval by the board of directors last week. The aircraft, planned to be delivered in 2014-18, are strategically important to Boeing because the large order will help ease the transition from the 737NG to the MAX.
Ryanair plans to grow its fleet to 400 aircraft in 2018 from around 300 today. Of the 175 additional 737s, 100 will be used for expansion and 75 as replacements. O'Leary says one of the most important aspects of the -800 is that it can hold more seats than the A320. “Boeing doesn't get enough credit for the phenomenal success of Ryanair,” he notes.
While Ryanair had expressed an interest in the, O'Leary now says that aircraft is too small for the airline. However, he says Ryanair would look at it again if Comac introduces a stretched version, planned to enter service early in the next decade.
Boeing's success with Ryanair is mirrored by Airbus's with EasyJet, which signed a preliminary agreement to acquire up to 200 A320NEOs and 35 A320s. The deal is still subject to shareholder approval and has already hit some very public opposition by founder Stelios Haji-Ioannou, who has been against further expansion of the airline in favor of focusing more on shareholder value.
The EasyJet deal is an even bigger blow forthan for Boeing. The Canadian manufacturer had been pitching a 160-seat version of its against Boeing and Airbus narrowbodies and had high hopes that an EasyJet buy would become the breakthrough for its new jet. Bombardier says it is still in discussions with EasyJet about a possible order.
Once shareholders approve the agreement, EasyJet plans to place a firm order for 100 NEOs plus 100 options. The 35 A320s are options that are converted from a previous deal. The current-generation aircraft are to be delivered in 2015-17. The airline plans to take on the NEOs in 2017-22.
EasyJet says it is aiming for a fleet of 276 aircraft in 2022, but the availability of options and a flexible retirement schedule for its existing aircraft could put the fleet size at 165-298. The carrier plans to use 85 of the 135 A320s and NEOs to replace aging aircraft.
The massive commitments made here last week—along withorders for more than 200 MAXs and NEOs in January 2012—beg the question of whether overcapacity is building up in the European direct services market and will likely lead to more competition between low-cost carriers, which they have so far sought to avoid. The deals are also likely to move more low-fare traffic on trunk routes that have been the domain of legacy airlines.