The famous ‘What’s in a name? That which we call a rose by any other name would smell as sweet,’ line from Romeo and Juliet is often used to imply that the names of things do not affect what they really are. That would perfectly sum up Boeing’s current dilemma with its grounded MAX jets, as while examples of the latest generation of the airliner sit idle around the globe, around 30,000 737 flights are still departing daily from airports across the world this month (July 2019), according to OAG flight schedules.
Boeing says it has no plans to rename the aircraft when it returns to our skies, either later this year or perhaps as late as early 2020. After all, it has been here before with the 787 Dreamliner and more than 850 examples are now in service, although some are still grounded due to engine related issues.
When the MAX belatedly flies again it will still be the same aircraft, but with some software and safety upgrades, but marketing experts suggest that the tragic Lion Air and Ethiopian Airlines crashes and subsequent branding may have damaged the brand too strongly.
Saudi Arabian low cost carrier flyadeal recently dropped plans to buy the MAX and has instead chosen to acquire the rival Airbus A320neo as part of a new deal signed by its parent Saudia with the European manufacturer. While not a cancellation – its original deal was simply a commitment to buy – the switch secured major mainstream media attention.
International Airlines Group (IAG) had secured similar attention when it placed a surprise Letter of Intent (LoI) commitment to buy up to 200 MAX aircraft from Boeing during the recent Paris Air Show. Not many people saw that one coming from the current Airbus A320 Family and A320neo Family customer, but it was a logical move and a shrewd bit of business from its CEO Willie Walsh, a former 737 pilot.
While we must note the terminology and that this is just a LoI, which is just an intent to purchase and will not involve any current financial obligation, given the current environment, IAG would have a secured a hefty discount on the list prices. An ‘order’ of this scale would have secured a considerable reduction per aircraft, but with Boeing in need of a big name backer for the aircraft some aircraft finance experts have suggested that IAG could have paid as little as USD30 million per aircraft versus a retail price of between USD120 million and USD130 million.
IAG’s Willie Walsh says the company has been concerned with its reliance on a single manufacturer and that delays in aircraft deliveries also pushed it to consider a Boeing deal. Its range of airlines flying under the IAG umbrella would also make it easier to incorporate a second short-haul aircraft, with the additional crewing and maintenance costs offset by the cost price benefits. IAG has suggested the aircraft would be destined for LCCs LEVEL and Vueling and its British Airways operation out of London Gatwick, with deliveries planned for the 2023-2027 window.
But, what was most interesting about this announcement was that not once did IAG refer to the aircraft as the MAX in its press release confirming the deal, instead simply describing an intent to purchase 737-8 and 737-10 jets. Boeing’s own press statement included the term ‘MAX’ 13 times.
Similarly, this week an image of the latest of Ryanair’s new 737s has been captured with the ‘737 MAX’ name on the forward fuselage replaced with ‘737 8-200’. The budget carrier is the first, and to date only, customer for this version of the aircraft which has capacity for up to 200 passengers. Ryanair plans to configure its aircraft with 197 seats, which is eight more than the 189-seat 737-800s it will replace.
In public statements IAG and Ryanair have played down the removal of references to the MAX, but it is clear both airlines do have some concerns over how the public will react to flying onboard the aircraft. Even before the aircraft’s grounding US airlines were allowing passengers to switch any flight bookings to be flown using MAX aircraft to one with an alternative aircraft.
CAPA Insight: Flying Boeing’s 737 MAX FAQsWhat is the current situation with the 737 MAX?;
Why was the 737 MAX grounded?;
What is the problem?;
What is Boeing doing to return the aircraft to service?;
What are national regulators doing?;
Will non-US regulators accept the FAA conditions for return to service?;
Will it/has it become a political football?;
What is the air travel industry doing to compensate for the capacity shortages?;
Which airlines are most affected?;
What is the financial impact on Boeing?;
Will Boeing change the name of the 737 MAX?;
Will some travellers refuse to fly the aircraft when it flies again?
In a recently published insight article CAPA – Centre for Aviation says “there will be an element of boysy macho thinking” that says keep the MAX name, but balances that “there will be (divided) marketing opinions that say it should change”. Similarly, it says there “definitely” will be some travellers who refuse to fly the aircraft when it flies again, but notes that “travellers have very short memories in such cases” and, accompanied “by the right marketing campaigns,“ and “just small price discounts and convenience” could have a “very significant impact on passenger decision making”.
Questions around the restoration of 737 MAX services seem to get more complex by the day and without addressing the more complex and controversial aspects surrounding the aircraft, this short CAPA Flying Boeing’s 737 MAX FAQs summary is a valuable study that addresses at least some of the questions being more commonly being asked.