The American aerospace giant Boeing (BA, Financial) took the wraps off its 737 MAX 10 at the Paris Air Show. The company said that it bagged more than 240 orders worth more than $30 billion from at least 10 customers on the opening day of the most extravagant air show in the world. This gave the aerospace behemoth a clean victory over its European counterpart Airbus (EADSY, Financial) which managed to land orders worth $12 billion.
The 737 MAX 10 unleashed
The 737 Max 10 happens to be the largest model of Boeing’s 737 family that can carry up to 230 passengers, thereby putting itself in direct competition with Airbus’s A321neo jet. The plane is five and a half feet (66 inches) longer than the MAX 9, so it can accommodate more people.
All in all, the MAX Family is now available in five diverse versions: MAX 7, MAX 8, MAX 9, MAX 10 and the high-density version of 8 known as the MAX 200.
The plane is powered by the LEAP 1B engines that is manufactured by a joint venture between General Electric Aviation and France’s Safran Aircraft Engines namely CFM International. Boeing claims that the 737 MAX 10 will have the lowest cost per seat mile than any other single-aisle planes, making it count as a top choice of budget airlines in particular. The 737 MAX 10 is slated to enter service in 2020. The commercial aircraft president Kevin McAllister said, “Adding the 737 MAX 10 gives our customers the most flexibility in the market, providing their fleets the range capability, fuel efficiency and unsurpassed reliability.”
Boeing 737 MAX customers
Indonesia-based Lion Air Group is the launch customer of the aircraft as it made a commitment for 50 737 MAX 10 on the opening day of the Paris Air Show. The order is roughly valued at $6.24 billion. GE Capital Aviation, on the other hand, altered the 20 orders of the current 737 MAX model to the larger MAX 10 variant.
Spice Jet, an Indian-based airline, signed an MoU (Memorandum of Understanding) with Boeing for 40 737 MAX planes (worth $4.7 billion at marked price) that would include 20 737 MAX 10 and the other 20 is just a conversion to MAX 10 from 737 MAX 8.
Other airline operators who announced their orders and commitments for the new Boeing narrow body variant include Singapore’s BOC Aviation Limited, ALAFCO Aviation Lease and Finance Company, and China-based CDB Aviation Finance.
Last word
No doubt Boeing was a clear winner on the first day of the Paris Air Show as it outplayed Airbus in every department. Boeing wants to gain an upper hand over Airbus in the single-aisle aerospace market.
However, Airbus clearly dominates the single-aisle aerospace market as compared with Boeing. Though Boeing is the largest airplane maker in the world, it has to grow its single-aisle market, particularly in the fast-growing Asian economies, where Airbus takes a clear lead. Boeing remains ahead of Airbus in terms of deliveries of the 737 MAX, but Airbus counts for a bulgier single-aisle backlog. According to Boeing’s estimate, there will be demand for nearly 40,000 aircraft over the next two decades, of which 28,000 would be for single aisle planes. The 737 MAX 10 could play a major role in strengthening its position in this large lucrative market.Â
Disclosure: I do not hold any position in the stocks mentioned in this article.
