MAX will come back to a very different world

The 737MAX has been grounded over a year.

Only a few weeks back airlines were nagging hoping to speed things up, the FAA was prevaricating over recertifications and rightfully so.

Boeing had built and would have to retrofit, wiring looms on 420 undelivered and 387 already delivered but grounded aircraft.

The airlines wanted as many aircraft back as they could get as they prepared for a busy summer and record profits.

Now, the last thing most of them want is new aircraft. If they can find a way of not taking back some of those already delivered, none of them will especially mind.

Boeing had been heading towards 57 aircraft a month, but stopped at 52 having just ramped up, and then dropped to 42 before having to shut production down.

Now as workers go back to a very different Covid19 secure workplace, Boeing are wondering quite how many to build. What is going to be acceptable and when the airlines finally review their order books, and the leasing companies revise theirs, how many of the 4,000+ back orders will remain? 164 have already been cancelled in March alone. 69 more were cancelled by lease company GECAS on April 17.

Some airlines, like American are not changing course. They’ll keep their order and see the MAX as the replacement for the future.

Yet another problem has surfaced in the past weeks. The driving force behind new orders is fuel costs. For the first time in history oil prices for US crude, have gone as far as negative $40 per barrel. That means the oil producers are paying storage suppliers and investors to take the oil, there is so much swamping the market there is almost nowhere left to store it. And that means very, very, cheap aviation gas.

Cheap aviation gas means less motivation to buy new aircraft. This isn’t a short term problem either. With global demand down nearly 20%, the vast sea of oil is going to take as long as 18 months to use up.

Boeing isn’t yet offering a date for return to service. It may be as late as early next year, but September/October looks more likely. The next question is who will be first to order more?