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Friday, 17/01/2019, 05:33:51 AM
Avolon urges Boeing to continue tweaking 737 Max family
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Boeing should continue tweaking the 737 Max product line-up to help recover parity with Airbus in the single-aisle market, Irish lessor and major single-aisle aircraft customer Avolon says in a newly-published report.

A reactive product strategy forced Boeing to launch an incomplete 737 Max product family in 2011 in response to the market success of the re-engined A320neo, according to a 10 August “product assessment” of the Boeing single-aisle by Avolon.

After later launching a 200-seat version of the 737 Max 8, redesigning the 737-7 and launching the 737-10 to complement the slow-selling 737-9, the family may still not be complete, the lessor argues.

Avolon released the assessment as a thought leadership tactic, but has clear financial interests in the future of the programme. The report shows that Avolon has orders and commitments for 145 Max aircraft, although Boeing’s orders and deliveries website shows that only 22 are firm orders.

As a general rule, lessors seek to dissuade aircraft manufacturers from launching too many variants within an aircraft family despite the needs of some airlines for specific performance.

Despite that preference, Avolon applauds the launch two months ago of the 737-10, saying the 66in-stretched variant of the 737-9 “strengthens” the family as a “seat-cost machine”. The lessor is similarly appreciative of the baseline 737-8 in the heart of the market for keeping a cash operating cost advantage over the A320neo.

But the lessor is disappointed with the performance and design of the other three variants.

The 737 Max 200, which modifies the 737-8 with a mid-aft exit door to accommodate up to 200 seats, has attracted only three customers since it was launched, Avolon says. To impress investors, Boeing should offer the aircraft with a “well-understood, cost-efficient and timely reconfiguration package”, so airlines can easily return it to the 737-8 baseline with a maximum of 189 seats.

The redesigned 737-7 also has failed to compete at a parity basis with the A319neo. As a result, Boeing should review its pricing strategy for the 126-seat, two-class version of the 737 Max family, Avolon says.

Meanwhile, the launch of the 737-10 “severely” impacts the value proposition of the 737-9, the lessor adds.

“It is unclear what role remains for the aircraft but it is expected to have a very limited future,” the report states.

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