Boeing Scores in South Korea; MAX 10 Pressure Builds

2025 is shaping up as a turnaround year for Boeing. Its commercial business is performing far better than in recent years, and the latest boost comes from South Korea. While this order is undeniably good news, it also underscores Boeing’s most pressing challenge: certification of the 737 MAX 10. We have an upbeat report below, but we must acknowledge that Boeing still faces labor challenges. While the focus of the current issue is defense, it's essential to recognize that labor problems can quickly escalate. The apparent peace in Seattle and Charleston could quickly shift if St. Louis spirals. Labor relations remain a recovering wound. Industry labor stress is a problem for the entire supply chain. Korean's Order The deal includes 50 737-10s, eight 777-8 Freighters, 20 777-9s, and 25 787-10s. The 777 program orders are a good boost for the program. The MAX 10 item, though, warrants consideration. The widebody additions give the 777X program a much-needed lift. But the standout is the MAX 10—the second-best-selling variant of the MAX family, yet still uncertified. Korean Air already operates 23 737s (five MAX 8s) and has a steady pipeline of 56 Airbus A321neos (15 delivered, 41 still to come). The airline is simply hedging its bets in the most competitive segment in global aviation: high-density single-aisle jets. The MAX 10 order aligns Korean with Alaska, Delta, United, and Ryanair—among Boeing’s most critical MAX 10 customers. Korean Air currently operates a fleet of Airbus A321neos. Korean Air has a total order of 56 Airbus A321neos, with 15 delivered and 41 on order, following initial orders in 2015, October 2023, and a further conversion of options in December 2024. The regular follow-up orders for A321s underscore the demand for this size airplane. Korean is following the path of many other airlines, focusing on this size. The MAX 10 order fits right into the segment. Korean operates 23 737s, of which five are MAX 8s, so the deal does not mean a new fleet mix. Why the MAX 10 Matters The MAX 10 backlog sits at nearly 1,200 orders. Without it, Boeing has been hamstrung in competing with Airbus’ runaway success, the A321neo. Certification delays—driven by technical fixes for anti-ice systems, stall management, and FAA oversight—have cost Boeing dearly. Ryanair, for example, does not expect deliveries before 2027. Boeing plans to assemble the MAX 10 in Everett, in the space once occupied by the 747 line. At maturity, production could reach eight MAX 10s per month, a vital step in balancing Airbus’ dominance. This airplane is in high demand. The absence of this model from the market has been an enduring problem for Boeing in its effort to catch up with the A321 dominance of the segment. The following chart illustrates how lopsided the MAX family is without the MAX 10. Without the MAX 10, the family is seriously hampered, and the financial loss to Boeing is manifest. [caption id="attachment_103643" align="aligncenter" width="640"] AirInsight[/caption] To top it off, some of Boeing's most important customers are waiting for the MAX 10: Alaska, Delta, United, and Ryanair. Boeing plans to assemble the MAX 10 at Everett in the space formerly used for the 747 line. We estimate that once the MAX 10 is certified, Boeing could produce eight MAX 10s per month. The positive impact is significant. The China Factor There has been a steady rumble (also here) about China stepping up for 500 aircraft from Boeing. We noted earlier that a big chunk of such a deal would be MAX-focused. Out of 500 orders, what could a potential breakdown look like? [caption id="attachment_103645" align="aligncenter" width="255"] AirInsight[/caption] The logic behind this breakdown is as follows: As in other markets, China’s short-to medium-haul demand dominates, driven by the replacement of large 737-800 fleets and domestic growth, making the MAX 8 the workhorse. The MAX 10 adds high-density trunk capacity, but it is likely to have a smaller share initially. Long-haul recovery and flexibility: 787-9 covers most intercontinental missions efficiently; a smaller 787-10 tranche for high-capacity Asia/Europe routes; a limited 777-9 tranche for peak, slot-constrained trunk routes and 747 replacement. The FAA and MAX Rate The MAX 10 market success, driven by a combination of Chinese and South Korean orders, will put more pressure on Boeing to produce the airplane. Currently, Boeing has a rate limit of 39 MAX per month imposed by the FAA. Boeing has been meeting that rate for several months, and from reports, has met its key metrics. This means, even now, there is pressure to raise the maximum rate from 38 to 42. The FAA wants rate increases to come every six months. But how long can this limit remain in place? Is there flexibility to increase the rate as Boeing meets its metrics? Then there is the MAX 7 and MAX 10 certification. This has been a long-winded process. Boeing needs to fix the engine anti-ice issue. Then there's the stall management/yaw damper item needing a fix and FAA approval. The U.S. Congress granted a waiver from the post-2022 EICAS requirement, but conditioned on retrofitting MAX planes with enhanced AOA systems and stall warning switches. Moreover, FAA Administrator Bryan Bedford reiterated stringent oversight and no shortcuts on safety during the MAX 7/10 certification. Delays continue. Ryanair stated it expects a delivery in 2027. Summary Boeing is seeing strong customer demand. The OEM has improved production quality and has been hitting its FAA rate limit for several months. We think that the FAA will be encouraged to be more flexible and ease the rate to 42 before year end. But that does not help Boeing overcome its technical fixes needed to get the MAX 7 and 10 certified. With demand for the MAX 10 growing the pressure to get this done is critical for Boeing's success to remain on track. Bottom line: 2025 looks like Boeing’s best year in a long time—but whether it becomes a true turning point depends on one airplane.

Korean’s Order

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