Boeing Co Plans Early Deliveries of 737 Max Aircraft

Boeing Co Plans Early Deliveries of 737 Max Aircraft

Boeing plans to deliver its first 737 Max aircraft six months prior to its scheduled delivery in 3QFY17

Boeing Co Plans Early Deliveries of 737 Max Aircraft

By Hassan Ali on Feb 3, 2016 at 7:27 am EST

After conducting successful test flight of its first 737 Max single aisle commercial aircraft, Boeing Co. (NYSE:BA) now aims to deliver the aircraft ahead of the delivery schedule. The first 737 Max is slated to be delivered to Southwest Airlines in third quarter of fiscal 2017(3QFY17); however, the industry officials are of the opinion that the company is promising six months early delivery to its customers.

This would not be an easy task for Boeing, as it previously faced technical issues in its 787 Dreamliner and 747-8 commercial aircraft that led to delay in deliveries. Following which, the aircraft manufacturer also incurred additional costs to meet the delivery schedule.

However, with a successful test flight, Boeing remains confident that it might not experience any technical issues in the aircraft and it would deliver the jet before schedule. Boeing’s 737 commercial aircraft is the best-seller since its inception for over 50 years. The aircraft is also receiving high demand during present times, as airlines move away from using twin engine and wide-body jets to single isle and smaller size, in order to save on operational costs.

Not only this, the 737 series offer significant fuel savings as compared to other wide-body jets in the market, giving it a competitive edge over other rivals. According to Boeing, the 737 Max offers 14% reduction in fuel consumption compared to its previous models.

The main purpose of early delivery would be to increase the operational revenues as the company is also in the process to expand its aircraft production capacity to 57 jets by end of fiscal year 2019 (FY19). Alongside this, the aircraft manufacturer aims to get more orders through early deliveries, as it would also reduce the aircraft backlog earlier.

Boeing’s 787 Dreamliner faced multiple technical issues that resulted in delay of four years. The aircraft manufacturer scheduled four years for 787 to be manufactured after its launch; however, the first aircraft was delivered eight years after the launch. Considering past experiences, Boeing planned six years gap between the launch and delivery for its 737 Max.

Boeing’s 737 Max has been facing tough competition from Airbus’s A320Neo that received more orders since its launch as compared to Boeing’s 737 Max. Currently, Boeing has total 3,072 pending orders of its 737 Max series, while Airbus booked total 4,471 orders of its A320 Neo version.

Even in FY15, Airbus was able to book more orders compared to Boeing. As per the order book, Boeing scored total 409 orders of 737 Max during 2015 where Airbus A320 Neo managed orders of 564 jets. Apart from this, Airbus also has Boeing’s lead in booking most orders of commercial aircraft in FY15. On the contrary, the American aircraft manufacturer has the lead in delivering most commercial jets to its customers in comparison with Airbus.

Along with this, Boeing also delivered first two 787 Dreamliner to Saudia, Saudi Arabia’s national airline along with 777-300ER. Furthermore, the aircraft manufacturer is also expected to deliver a third 787 Dreamliner to Saudia next week, through which it will strengthen its presence in the Middle East.

Editing by Asad Rizvi; Graphics by Omair Raza

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