Air India Express accepts two more ex-China MAX 8s

As we enter the month-end over the weekend, Air India Express has taken delivery of two more Boeing 737 MAX 8s. There are significant implications from this. The two aircraft, VT-BWX and VT-BWQ, were ordered by China Southern and Xiamen, respectively. At delivery, these aircraft had aged considerably. The former was 2,251 days since its first flight, and the latter was 2,063 days from its first flight. Aircraft that have been parked for around six years are being sold at a deep discount. But this is still a win for Boeing - once operating, these aircraft generate spare and service demands. Revenue is better than parking fees and depreciation. India airlines, specifically Air India Express and Akasa, have been riding something of a gravy train with parked Chinese MAXS going undelivered. Boeing has been working hard to move the inventory. The convenient nexus of India's need for aircraft and Boeing's need to move MAXs may be tightening. China has now agreed to start taking Boeing deliveries. China has been taking deliveries from Airbus, but Airbus cannot supply China's needs by itself. China needs Boeing's production. COMAC also cannot deliver at a fast enough pace, and now that is going to shrivel, too Now What? As Boeing's MAX inventory shrinks, focus moves increasingly to new production. It is already being factored into the market's thinking. Single-aisle pricing will harden as the number of orphaned MAXs decreases. Airbus and Boeing want this very much. Similarly, the supply chain benefits from a rising tide, as it helps everyone. Boeing will also push certification of the MAX 7 and 10, respectively. There are still questions about the 25 MAX 7 inventory that is supposed to go to Southwest Airlines. But Boeing has an out here, in the form of Allegiant. Demand for the MAX 10 is high, and the market needs upsized models as soon as possible. The combination of factors is positive for Boeing. From being in a downward spiral, Boeing now moves into an upward spiral. But there must be no snafus. Another lapse in the form of a "quality escape" spells disaster and another reset. The lack of news from Boeing is a positive sign. Focused on getting things stable and production humming, must remain job #1.

No results