The 737 MAX is back to service. Now what?

After more than a year of grounding, The Boeing Company (BA) 737 MAX is back to revenue service, with Gol Linhas Aéreas Inteligentes S.A. (GOL) in Brazil doing the honours with its airliners of the model connecting key markets in Brazil.


Other airlines around the world expect to roll out Boeing’s narrowbody again in the coming weeks and months. Now that all eyes are faced at this worldwide relaunch, one question comes to mind: what’s next for the 737 MAX?


The first factor to take into consideration is from a safety point of view. After the chaos generated following the crashes that grounded all frames of the newest 737 variant around the world, various flight safety authorities investigated the aircraft’s systems with a fine-tooth comb.


"No aircraft in history has been through as much scrutiny as the Boeing 737 Max now underwent. As a result, if the multiple regulators did their job well, it could now very well be the safest aircraft model in the world. Time will tell." - Shakeel Adam, Managing Director Aviado Partners

After the crashes that seriously harmed not only the reputation of the MAX, but also that of Boeing and the FAA, we can all only imagine the level of conservatism that went into the review to ensure there won't be any further problems.


Even so, what most of the 737 MAX operators have been doing, besides the required crew training and adaptations for the aircraft relaunch, are confidence-boosting presentations of the airliner. GOL, for instance, made flights with executives and media before restarting operations with the jet.


In the U.S., American Airlines Group Inc. (AAL) is still to perform its first MAX revenue flight, but it has been doing the same in order to increase traveler confidence. All around the world, airline executives are flying the aircraft themselves as a show of confidence.


So far, customer confidence is still something to watch, but from the airline’s side, this is seemingly less of a problem. Ryanair’s (Ryanair Holdings plc - RY4C.IR) latest announcement that it’s ordering 75 additional MAX-8200 jets is the largest sign of confidence in the project since IAG’s (International Consolidated Airlines Group, S.A. - IAG.L) letter of intent for 200 MAXs in June last year, long before COVID-19 hit the world.


In the years to come, with the need for lower operational costs to match much-depressed yields after the pandemic, Boeing customers will want to benefit from the aircraft’s efficiency.


This way, the safe return of the MAX will represent a huge boost of confidence for Boeing.


But not everything is confidence-boosting for Boeing at the moment. Whilst it saw Airbus SE (AIR.PA) selling hundreds of its longer-range narrowbody A321XLR last year, it had its own problems to solve with the grounding of the MAX. Eyeing the demand for such kind of jet, it had its plans to launch a new, long-range variant of its 737 MAX 10, The Air Current reported. And then COVID arrived, bringing further losses to the manufacturer and making large investments like this even riskier.


"The MAX8 and its counterpart, the A320neo, are critical for airlines needing to reover from the pandemic. Their lower unit costs translate to lower break even load factors, which is critical during these low demand periods." - Shakeel Adam

Despite all these setbacks, the MAX is back in the sky -- seemingly in a much safer way after unprecedented scrutiny. It’s a relief to Boeing, and it allows the manufacturer to concentrate its focus on the huge challenges that are ahead. No doubt the whole industry will be watching keenly and no one wants to see the aircraft fail, because no one wants to see any more catastrophic loss of life.



Disclosure: The author of this article holds stock on at least one of the aforementioned companies.


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