Respondents divided on future of 737 MAX, says GlobalData poll

Having been grounded since March 2019, following two crashes, which killed a total of 346 people, Boeing has suffered a number of setbacks in its push to have the 737 MAX recertified. Credit: vaalaa / Shutterstock.

A recent poll conducted by GlobalData found that respondents were evenly split on whether Boeing’s 737 Max would survive the Covid-19 crisis. This arguably is a reflection of the uncertainty surrounding the stricken narrow-body aircraft, plagued by ongoing issues. Having been grounded since March 2019, following two crashes, which killed a total of 346 people, Boeing has suffered a number of setbacks in its push to have the 737 MAX recertified.

GlobalData Associate Analyst Harry Boneham comments: “Despite the numerous setbacks incurred, it is expected that recertification will be attained. Furthermore, the 737 MAX is likely to perform a central role in Boeing’s commercial aerospace recovery in the post-Covid-19 market.”

The Covid-19 pandemic has gravely impacted the global commercial aerospace market, with the International Air Transport Association (IATA) expecting Revenue Passenger Kilometres (RPKs) to decline by approximately 50% this year. This has accelerated a collapse in demand for commercial aircraft. In addition, air passenger volume is not expected to recover to pre-Covid-19 levels until 2023.

Following previous crises such as 9/11, the recovery of the commercial aerospace industry was not uniform with demand for narrow-body aircraft being less impacted and recovering quicker than wide-body aircraft. It is likely that in the post-Covid-19 market, producers will have to focus upon narrow-body aircraft to adjust to demand.

However, it could be argued that Boeing’s narrow-body offerings are relatively limited with orders concentrated on the 737 MAX. According to Boeing reporting, in 2019 67.2% of narrow-body orders and 18.5% of total orders by units were for the 737 MAX. In 2019, Boeing relied more heavily upon sales of wide-body aircraft due in part to the ongoing difficulties with grounding and recertification.

However, in the context of the post-Covid-19 market, this reliance is no longer an option. While there has been speculation regarding the development of an entirely new narrow-body aircraft, this is not credible in the short and medium term. Therefore, the 737 MAX will play a central role in Boeing’s commercial recovery, accounting for the majority of narrow-body orders.

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