Page 74 - World Airnews Magazine November 2020

COLUMN

THE FACTORS AT PLAY

By Max Kingsley-Jones, senior consultant at Ascend by Cirium

delivery is not achieved within 12 months

almost immediate resumption of deliver- of the original contractual date, then the
ies to US airlines. It is likely that the FAA’s

he signs are there that the Boeing approval will be shadowed promptly by number is potentially high.
T737 Max should finally return to authorities participating alongside it in the Ascend by Cirium estimates that Boeing

the skies before the end of 2020. 737 Max Joint Operations Evaluation Board: has already shed approximately 1,300

But the recertification will be just the Brazil, Canada and the EU. Max orders in the wake of the grounding,

start of a new set of challenges for Boeing, The approval status in key Max market including 553 confirmed cancellations plus
its customers, and the wider industry. China is less clear but might be expected to more than 750 orders that are subject to

There are myriad issues that will come follow within months of the FAA’s decision. ASC 606 accounting adjustments – orders

into play as the programme is revived If US Max clearance does come soon, that are still firm but which the airframer
more than 20 months since its grounding, then Ascend by Cirium estimates that 2020 believes are unlikely to complete. Some of

including some linked to the airline trading deliveries could just reach double figures. these changes may affect aircraft that have

conditions caused by the coronavirus As Boeing works to clear the backlog already been built.

pandemic. of built aircraft, along with integrating The Max’s ASC-adjusted firm backlog

Questions remain around areas such deliveries from the Renton assembly line, stood at 3,403 aircraft at 30 September.
as the pace of the Max fleet restoration we project annual shipments reaching 430 There will be several drivers determining

(among the installed fleet and the hun- in 2021 and 480 in 2022, before declining the pace of return to service of the 385

dreds of built but undelivered airframes); below 400 over the following two years. aircraft grounded in March 2019. Once

operators’ appetite to add Max aircraft Assuming deliveries are a mix of stored approval is received within each operator’s

and crew-training capacity; the potential and new-build airframes, we estimate jurisdiction, every aircraft will have to un-

displacement effect on other fleets; and that the backlog of parked aircraft will be dergo post-storage checks and testing.

the alignment of regulatory approvals cleared by the first quarter of 2023. The From a demand-side perspective, airlines

worldwide. delivery rate would then fall slightly to ap- will look at their fleet-planning strategy
amid the downturn and training availability

RENEWED MAX DELIVERIES WILL proximately 390 in 2023, with production required for flight crews.

IMPACT EXISTING 737 FLEETS stabilising at a monthly rate of 31 aircraft. But there will certainly be implications

The resurrection of the mothballed,

One crucial parameter is beyond the undelivered aircraft will be complicated by for incumbent single-aisle fleets, as amid

industry’s control: the acceptance by the some airframes now being unallocated due the crisis the Max’s absence has helped the

travelling public to fly on the aircraft. to cancellations or rescheduling. supply and demand balance. Its re-intro-

While the narrative on the Max’s safety duction will create a displacement effect
These aircraft would require some cabin

failings has perhaps been overtaken by reconfiguration and estimating the number at operators where they will replace rather

the Covid-19 pandemic, media attention involved is imprecise. But with customers than supplement existing aircraft – pre-
around its re-introduction could quickly potentially able to cancel penalty-free if dominantly 737NGs.

revive painful memories. The likelihood is that each Max
As it stands, there are 385 deliv- returned to service or delivered will re-
ered Max aircraft grounded world- place a 737NG on a one-for-one basis.

wide, according to Cirium fleets This will increase supply when capac-

data. A further 450 Max airframes ity growth is off most airlines’ agenda,

are estimated to have been built and and so there will be implications for

stored awaiting delivery. values and lease rates - not just in the

If, as is now widely expected, recer- 737NG community but also across the

tification by the US Federal Aviation wider single-aisle spectrum. Q

Administration (FAA) is imminent, Article shortened and courtesy:

that should clear the way for an https://www.flightglobal.com/
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s | December 2017
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World Airnews | November / December 2020
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