Airlines continue to back 737 MAX with new orders, deliveries

A number of airlines have come out in public support of Boeing and its newly recertified 737 MAX jet by taking delivery of delayed orders and placing new ones, a win for the embattled US planemaker.

European budget airline and major customer Ryanair has ordered an additional 75 MAX jets, a deal worth over $9 billion, bringing its total MAX order as high as 210 aircraft. 

The order is the largest Boeing has seen on the aircraft since 2018, following the first of two fatal crashes that killed a total of 346 people, and saw the jet grounded around the world for nearly two years.

The plane has undergone intensive safety testing, as well as upgraded software and training protocols, prior to the jet being returned to service.

“I’ve always had faith that the order book would begin to fill with the return of the industry,” Boeing chief executive David Calhoun said at a signing ceremony in Washington.

As regulators move to clear the aircraft for flight after revisions to cockpit software and pilot training, Boeing is hoping for more eye-catching MAX orders, sources have said.

Ryanair group chief executive Michael O’Leary called the 737 MAX order “the deal of the new century”.

While Ryanair did not disclose what it paid for the jets, at a list price of $125 million per jet, the total order is worth over $9 billion.

However, Ryanair has previously touted that it would be looking to order new MAX jets for a significant discount, with some industry sources suggesting airlines willing to back the MAX could see discounts in excess of 50 per cent of the list price.

Ryanair was in fact expected to win an even bigger discount, perhaps more than two-thirds of the list price, in return for a headline-grabbing relaunch of the MAX that helps fill gaps left by cancellations, sources have said.

Part of the negotiated discount was compensation for the 18-month delay to the first delivery of the MAX, O’Leary said.

Asked during the signing ceremony about price concessions Boeing offered, O’Leary joked: “Not enough … I am sorry to say it is a very modest discount.”

Even at a fraction of the MAX’s list price, the deal could be a lifeline for Boeing, as it continues to bleed cash in light of the pandemic, on top of its stockpile of roughly 450 undelivered MAX jets currently being stored.

Ryanair expects to receive its first jet early next year and the final one by the end of 2024. 

The Dublin-based low-cost carrier also hopes to negotiate on another large MAX order within the next 18 months, and expects to be flying the 230-seat MAX 10 by 2025, according to O’Leary.

“I think regulators are looking for some further design work to be done so I think the delivery of the MAX 10 is going to slip back maybe 12-18 months,” he said.

Across the pond in the US, airlines have publicly welcomed the deliveries of delayed 737 MAX orders, with United Airlines claiming its impending delivery of eight jets will be the “first” since the grounding. 

Both United Airlines and American Airlines are expecting to take delivery of new 737 MAX jets within the next week.

American Airlines has doubled down on its intentions to return the plane to commercial service as soon as possible, with its first passenger service between Miami and New York booked for 29 December.

American Airlines’ maintenance teams are scrambling to complete all required safety changes to its fleet of Boeing 737 MAX jets ahead of its phased return to service, while deliveries of new jets are set to begin as early as this week.

American currently has 24 MAX planes in its fleet, and plans to take delivery of eight new 737 MAX jets from Boeing this month.

American has said it will gradually reintroduce the jets, as its 2,600 737 pilots cycle through 2.5-hour simulator training.

Further, the carrier has said it has 260 specialists, divided into three shifts, working around the clock, seven days a week to roll out two jets every seven to 10 days with the necessary system upgrades.

But as the aircraft returns during a pandemic that has crushed air travel demand and left questions over customers’ willingness to fly, American is planning a phased re-introduction to its commercial schedule.

“We don’t want to bring them out so fast that we’re not flying them … and have to put them back into storage,” said American’s chief operating officer David Seymour.

Each plane will take an operational readiness flight and receive FAA sign-off before flying passengers.