After the grounding, Boeing's MAX production kept operating, not knowing how long the grounding would last. Supply chains are sensitive, and shocks cause chaos. Boeing, a century-old firm, knows this and was determined not to shock the supply chain. Circumstances evolved, though, as the grounding ran far longer than expected. Boeing could not afford to keep production rates steady without deliveries, so it had to pass the shock on to its supply chain. As the MAX crisis evolved, Boeing ran into a situation where its costs stayed steady but revenues plummeted. The 737 is Boeing's "bread & butter" program. Disrupting this program has catastrophic consequences. Topping it off, air travel virtually stopped as the pandemic raged. It was the worst of storms for Boeing. The India Opportunity Fortunately, as these events played out, India was clawing out of the pandemic. Air India was being privatized and absorbed Vistara. Indigo, a relatively new airline, was on a tear building market share. Other Indian airlines tried to grow fast, and several fell. Kingfisher and Jet are among the most prominent. Another was GoFirst, trying to chase Indigo. It, too, failed. SpiceJet survived and kept going, but it fell behind Indigo and continues to struggle. Indigo kept growing because it had an order book with Airbus and steadily delivered new aircraft. As Go First stumbled, the market didn't miss a beat. Other airlines accommodated demand growth. The chart describes the fantastic growth in India's air travel market, which is arguably becoming the fastest-growing worldwide. [caption id="attachment_90536" align="aligncenter" width="640"] DGCA[/caption] Despite market fluctuations with airlines folding, there are two successful airlines, and we list them below. [caption id="attachment_90573" align="aligncenter" width="699"] AirInsight[/caption] The table lists the two airlines' fleets. Of these 69 aircraft, only two MAX 8- 200s were destined for the customer, Akasa. The third MaX 8-200 at Akasa is an ex-VietJet aircraft. Amid the MAX crisis, Indian air travel came to the rescue. Airlines like Air India Express (an Airbus customer) and Akasa needed a lift quickly. Boeing had inventory it could not move, and the Chinese customers were not taking MAX deliveries. The MAX was a perfect fit for India. It had the right range, the right seating capacity, and it could be delivered quickly. The last point is probably the most crucial. When examining MAX deliveries to the big US airlines and Ryanair, none are NTUs from another order. The Indians helped clear out the MAX inventory. As the old saying goes, circumstances create strange bedfellows. Everyone's a winner Boeing almost certainly moved these aircraft to India at bargain pricing. Any dollar earned in sales is a positive because parked inventory earned nothing. Moreover, with these aircraft now in service, Boeing draws revenue from spares and MRO. With a 20-year operational life, Boeing will recover much of its sunk costs in these aircraft. Remember that more MAX orders are assured as India's airlines keep growing.
