Boeing CEO Open to Shelving 737-10 Amid Political Standoff

Boeing 737-10
Boeing would cancel the 737-10 before adding new flight-crew-alerting capability.
Credit: Joe Walker

Just imagine for a moment if Boeing did not build a 737-10 after all? What would that do to its share of the single-aisle market? How would that affect pricing for the Airbus A321neo, which would be left with a monopoly at the upper end of the narrowbody market, and airline fleet plans? Would it force Boeing to accelerate a new aircraft program? How would investors react?

Those seemingly theoretical questions have gained new weight now that CEO David Calhoun has made it clear that the company has not ruled out the drastic step of shelving the largest variant of the MAX family. At issue: a looming standoff with Congress on whether to extend a year-end deadline that would require changes to the aircraft’s flight deck system. If Boeing cannot certify the 737-10 by then, and a waiver is not granted, the company would have to redesign the aircraft’s flight deck to add an alerting system, eliminating its commonality with the other 737 MAX variants—a key selling point of the family.

“The [737-10] is a little bit of an all-or-nothing,” Calhoun told Aviation Week editors in an interview at the company’s new headquarters in Arlington, Virginia. “I think our case is persuasive enough. . . . This is a risk I’m willing to take. If I lose the fight, I lose the fight.”

  • More than 600 737-10 orders from 18 customers at stake
  • Analysts: Move would force Boeing into new large narrowbody

The company is pressing on with 737-10 certification, focusing on the process instead of potential roadblocks. If the variant is forced to meet the current alerting requirements, Boeing must ask itself: Is it better to spend time and money changing a design that some customers may reject or to shelve the program?

Calhoun affirms that a cancellation of the -10—which has won more than 600 orders from United Airlines and 17 other customers—has not been ruled out. “We end up having to face right into that question,” he said. “If you go through the things we’ve been through, the debts that we’ve had to accumulate, our ability to respond, or willingness to see things through even a world without the -10 is not that threatening.”

Still, the Boeing chief exuded optimism about the program’s future. “We believe in this airplane, period,” he said. “We believe the intent of the counterparties that negotiated the [flight-crew-alerting mandate] time frame wanted this airplane covered. And I find very few voices that would suggest otherwise.”

Boeing’s original plans did not include the extra stretched model of the MAX family, but it launched the -10 five years ago in response to calls from loyal customers for a Seattle-developed alternative to the Airbus A321neo. Among the model’s challenging requirements were several expensive innovations, including the development of the first major change in the main landing gear configuration since the 737’s much-evolved 1960s-era baseline design.

Canceling the -10 “would be a real blow for the MAX program,” observes Agency Partners aerospace analyst Sash Tusa. “Boeing could no longer compete in all-important segments with the A320neo family.”

With 4,211 orders through May 31, the A321neo has sold far better than the 737-10, with about 640 orders, according to the Aviation Week Network Fleet Discovery database. United Airlines and VietJet Air have the most 737-10s on order, with 253 and 106, respectively. Other notable customers include Lion Air, with 50 orders; FlyDubai, with 44; and Alaska Airlines, with 28. But the -10’s presence has enabled airlines to hold the line on A321neo pricing, Tusa says. Without it, Airbus would have a “free pass” to increase prices—a big negative from the airlines’ perspective.

Tusa says a termination of the 737-10 would bring the launch of a new clean-sheet Boeing model much closer. “Boeing cannot wait another 10 years,” he says. Such an aircraft would likely start at around 200 seats, putting it at the “bottom end of the middle of the market,” Tusa projects.

“Canceling the -10 would force Boeing into magic sooner,” agrees consultancy Avitas Senior Vice President Adam Pilarski, referring to a new aircraft program. “Boeing has to do something. The 737-10 was not very impressive in my view.” Pilarski points to the limited customer base—18 airlines and lessors—and asks: “How important is the program?” Boeing walking away from it would “not surprise me,” he says.

Pilarski also is not as optimistic as Calhoun that the impasse will be resolved by year-end. “I don’t think there is a high chance for an extension” of the regulatory deadline, he says. “The FAA and politicians are still mad at Boeing.”

But a cancellation of the 737-10 “would be a surprise to the market,” says Bank of America aerospace analyst Ronald J. Epstein. “They would have nothing for the large narrowbody segment.” He also thinks Boeing should then develop a new aircraft. “But I’m not convinced they will,” he adds.

That Calhoun is publicly talking about walking away from the -10 increases the political pressure on lawmakers to grant the needed relief. The issue stems from a provision in a December 2020 law that puts a two-year window on the FAA’s ability to issue a type certificate to a transport category aircraft unless the design complies with the latest flight-crew-alerting system regulations. The FAA granted the 737 MAX relief from specific flight-crew regulations introduced during the 737’s lifetime based on Boeing’s contention that complying with the updated regulations would add unnecessary expense and pilot training to a safe baseline design.

The two-year grace period was selected to allow both the 737-7 and 737-10, the only aircraft affected by it, to earn FAA approval. A new, more rigorous certification process combined with Boeing’s inability to meet the agency’s requests in a timely manner have made the law an issue for the 737-10.

Lawmakers are sending mixed signals. Rep. Peter DeFazio (D-Ore.), head of the House Transportation and Infrastructure Committee, opposes any relief. Sen. Maria Cantwell (D-Wash.) has urged the FAA to weigh in, even though the law places the issue in Congress’ hands, not the agency’s.

The issue’s political ramifications mean a decision may not come until 2023. DeFazio, who has helped amplify calls to hold Boeing accountable for its role in two 737 MAX fatal accidents and revamp the FAA, is not seeking reelection this November. His departure, combined with gains by the generally more corporate-friendly Republican Party, would likely make the next session of Congress, which convenes in early 2023, more sympathetic to Boeing—or at least less likely to uphold a symbolic requirement.

Calhoun emphasized that Boeing believes the case to certify the 737-10 without an enhanced crew-alerting system is strong. Among the evidence: Older versions of the 737 have better fatal-accident and hull-loss figures than nearly every other fleet type. The 737-10 also includes new safety-related improvements. Adding a system that affects flight-crew workload to one member of an aircraft family flown by a common pool of pilots could introduce new safety risks.

“We’ll make that case to all parties, and I believe the outcome is going to be favorable and that we’re going to have a [737-10] flying out there, regardless of timing,” he said. “I don’t expect [to cancel the program], and I don’t want anybody to think that. It’s just a risk.”

Sean Broderick

Senior Air Transport & Safety Editor Sean Broderick covers aviation safety, MRO, and the airline business from Aviation Week Network's Washington, D.C. office.

Joe Anselmo

Joe Anselmo has been Editorial Director of the Aviation Week Network and Editor-in-Chief of Aviation Week & Space Technology since 2013. Based in Washington, D.C., he directs a team of more than two dozen aerospace journalists across the U.S., Europe and Asia-Pacific.

Jens Flottau

Based in Frankfurt, Germany, Jens is executive editor and leads Aviation Week Network’s global team of journalists covering commercial aviation.

Guy Norris

Guy is a Senior Editor for Aviation Week, covering technology and propulsion. He is based in Colorado Springs.


"If I lose the fight, I lose the fight..."?

He's already lost it. Isn't it time someone told him?
BIG changes are needed at Boeing. Nobody (except Airbus) wants an Airbus monopoly in increasing parts of the global picture.
It would be good to know exactly what Crew Alert(s) we're talking about and what triggers it. Or a reference to the FAA crew alerting reg would be good.
Well one way to stiff Congress is to point out the jobs lost for nixing the 737-10. If it's not many, Boeing shouldn't go there. If it's a lot, they should beat that fact to Congress over their heads with it like a baseball bat. A comment on Adam Pilarski's view. How is not an order book of 600 not impressive? Advancements are made in small steps. Make too big a jump in technology, have accidents, issues and that can doom a marque!
So a company which has built an aircraft which has killed hundreds of people is going to determine the level of safety that will be built into a new larger version of that aircraft?

Look closely at the MAX 10. In order to lengthen the fuselage of the 737, the nose will be elevated, the landing gear extended and the flight control system will push the nose forward as the aircraft nears the ground in the landing phase in order to not hit the tail. Will someone finally say, "A stretch too far."?

And why should Boeing be given the benefit of the doubt? Over the past years AWST has been filled with articles about Boeing programs which are unable to deliver the goods as promised. Why will the MAX 10 be any different?

Hubris has not yet been purged from the ranks of overpaid Boeing executives.
Your point is well taken but I side with Adam: Whereas market shares have mostly been, either way, within the 40%-60% bracket since the A320CEO, a Boeing Max-10 performance of 600 vs Airbus 4,200 is "not very impressive". There is no way around it.
As far as I’m concerned Boeing has already lost all credibility and the race with Airbus. Another 737 variant brings nothing to the race other than heavy discounts for the airlines, losses to Boeing and a little face saving.
Boeing’s management have no plan, no argument and no future in commercial aircraft
As far as I’m concerned Boeing has already lost all credibility and the race with Airbus. Another 737 variant brings nothing to the race other than heavy discounts for the airlines, losses to Boeing and a little face saving.
Boeing’s management have no plan, no argument and no future in commercial aircraft
Cancel the program, hire more engineers, listen to them, and get on with it.

Boeing squandered its credibility over the past decade. Time to step up.
WTF. Boeing's management has killed hundreds of people already over the same problem, an MCAS crew alerting system and computer imput that they never ever bothered to tell pilots about. Now they are back to dictating safety again?
Once upon a time we used to say if it ain't Boeing then we ain't going. Boeing used to be market leader by a country mile, Airbus was the follower. Once Boeing's HQ was shifted to Chicago, the corporate greed set in. Boeing's management were dead set on maximising their bonuses. They hydraulic up the share price by spending $60 billion on stock buybacks to make themselves rich at the expense of the company. It was criminal. It was disgusting. It was obscene. Instead of a clean sheet single aisle aircraft we got a 1960's designed aircraft with clip ons. Instead of the NMA, we got nothing. Instead of the great B787 dreamliner, we got ongoing problems. Instead of a 70% stake in Embraer we got nothing.
This is Wall Street greed at its greatest. Why is there no watchdog prosecuting management and Boards for enriching themselves whilst destroying shareholder wealth. If this was China, they would all have been awarded the 20 gram medal to the back of the head. How many millions of lives have Boeing's management and Board destroyed financially to enrich themselves. Boeing's reputation is in ruins. Calhoun still doesn't accept any responsibility on behalf of Boeing for the deaths in Indonesia and Ethiopia.
Calhoun needs to be gone by Monday. Boeing can never recover with arrogant people like him in charge.
People still don't trust the Max. If the 7 and 10 get Boeing's special waiver, then nobody will ever trust Boeing again.
Calhoun and every politician who signs off Calhoun's safety reduction should all be off to prison when the first plane crashes.
I won't be killed by a Max crash because I won't be getting onto one.
The rants here are getting increasingly vitriolic and emotional. Not very helpful. Not offering a better proposed direction or plan.
Keep in mind that Calhoun and the other top management are already the replacements for the CEO and VPs that the board dismissed after the crashes. Not clear that replacing them a second time would have any benefit.
Also keep in mind that Boeing engineering conducted extensive and diligent efforts to find a new direction, for NMA or 737 replacement. But the business case was not there. No significantly better engines are available soon, and the modest benefits from a carbon fiber airframe on a 200-seater could not justify the major development cost and higher production cost. The closely-matched MAX and neo are about as good as it gets at the moment.
Boeing's only reasonable path is to focus on getting the MAX 10 approved properly and promptly.
Jens has previously written that Boeing and the FAA and Congress might balance the options by providing a 'streamlined' crew alerting system for the MAX 10. If it is basically a new software subsystem that Collins adds to the existing hardware, it might also be offered on the other MAX models as an optional upgrade. Or it could be made standard on the entire line, so training would be the same for all models. Is anything more known about that, from Jens or others?
It is so disappointing that Boeing cannot perform to its previous high standards. The B737-10 missteps are not isolated. Add to that are the manufacturing flaws on the B787 and the lengthy delay of certification on the B777X. Yet Boeing wants to blame others for all its problems. They have known for 18 months of this certification deadline. Yet with all they have, they still can’t perform. Don’t extend the deadline. If they can’t figure a solution, let the B737-10 go.
My friend says that this is old news! With over 150 orders by American Airlines staring 2025!
My friend says that this is old news! With over 150 orders by American Airlines staring 2025!
What is the salvage value of a 737-10?
Regarding the question for Jens in my comment in this thread on 7/7, a search turned up an insightful article by Dominic Gates in the Seattle Times on April 19, 2022 that describes the 'streamlined' alert system. The proposal is from the well-known Boeing whistleblower Curtis Ewbank, and was submitted to the Senate committee investigating the MAX crashes.

Gates describes multiple levels of complexity in the proposal, and Ewbank's conclusion that a the next-to-simplest option would fulfill all the requirements for a modern EICAS. He believes this could indeed be installed on all MAX versions to allow uniform pilot training. However, Gates' quotes from other experts note that the transition could get messy, and would require very careful management.
Already Red Indians knew: „If you are riding a dead horse, step off!“ At least with the -10, the family is done. We all know the 737Max of 2022 still has a lot of the 367-80 beneath the skin. That‘s similar to Airbus still putting their stakes on a modified Caravelle.