DBEA55AED16C0C92252A6554BC1553B2 Clicky DBEA55AED16C0C92252A6554BC1553B2 Clicky
April 12, 2024
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News:

It is expected that the FAA and several international regulators will clear the Boeing 737 MAX to return to service after modifications later this week. This will enable Boeing and airlines to modify the programming and wiring issues on the aircraft and resume service once pilots are fully trained. Southwest indicated that it expects to return the MAX to service in the second quarter of 2021, and American appears to be ready for an initial MAX route beginning December 29th on the New York-Miami corridor.

But with the MAX coming back, we aren’t seeing the MAX name as prominently mentioned by airlines. This began with an order from Polish airline Enter Air, who ordered two but referred to the aircraft as the 737-8. Several customers have dropped MAX from their references, including Air Canada and Ryanair, and American Airlines has removed the word MAX from the air safety cards placed at every seat, instead of using the 737-8 designation.

It appears that airlines are skittish about the impact of using the MAX name, likely for good reason, as our sources indicate that market research about the MAX indicates high negatives after the two crashes and extended grounding. Airlines, therefore, don’t want to use the word MAX, and Boeing is likely to follow along with whatever the airlines want to call the airplane.

Analysis:

The MAX brand is damaged goods after two crashes and an extended safety grounding. Customers, who no longer implicitly trust governments and corporations as they once did, are asking whether the same company that built a flawed airplane and the same regulator that determined it was safe when it wasn’t, can be trusted. That brand is now associated with failure, something Boeing’s customers want to change.

The initial MAX branding for a re-engined aircraft was effective in competing with the Airbus neo branding for the new engine option. MAX implied strength versus neo implying new and was effective for Boeing before the crashes. While Airbus had jumped to a 1,000 aircraft lead in orders when it launched the neo, the MAX, launched the next year, was equally as successful and had begun to match and close the gap with its rival prior to the crashes.

Insight:

Boeing is quietly rebranding the MAX back to the nomenclature of its model designators, the 737-8 and 737-9, and will likely utilize these for the forthcoming 737-7 and 737-10 models rather than the MAX brand. The MAX designation will likely fade out slowly over time, with Boeing changing over slowly over the next year from MAX to the model number. Both the airlines and Boeing recognize that the MAX brand is heavily damaged and if retained would likely have longer-lasting impacts on passenger acceptance and demand for the aircraft.

A slow and painless transition, utilizing the model number rather than the MAX designator, would enable Boeing to gracefully back off of the name without a formal change by simply stopping its use in its public statements and advertising. It would not take long for airlines to adopt the model designation as a preferred alternative, and solve the branding issue without a major impact. It is quite apparent that passengers would have less difficulty boarding a 737-8 than a 737 MAX 8.

Should Boeing rebrand and quickly cut the cord, or continue a process through which the MAX designator dies from attrition as it is replaced by the model designator in communications? While the former would be a sharp switch, we believe Boeing is doing the right thing by letting the MAX brand die a slow death. It can claim the MAX is back later this week, and then back off to using the aircraft designation as the new name in further communications to provide a win-win situation – no negatives for the airlines and a graceful exit for Boeing.

While Boeing hasn’t yet formally re-branded the MAX, in practice, the cards are already on the table, and being led by the airlines. Boeing will need to follow along in order to keep their customers happy and returning for additional airplanes. The MAX is dead, long-live the 737-8 and 737-9.



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President AirInsight Group LLC

News:

It is expected that the FAA and several international regulators will clear the Boeing 737 MAX to return to service after modifications later this week. This will enable Boeing and airlines to quickly modify the programming and wiring issues on the aircraft and resume service once pilots are fully trained. Southwest indicated that it expects to return the MAX to service in the second quarter of 2021, and American appears to be ready for an initial MAX route beginning December 27th on the New York-Miami corridor.

But with the MAX coming back, we aren’t seeing the MAX name as prominently mentioned by airlines. This began with an order from Polish airline Enter Air, who ordered two but referred to the aircraft as the 737-8. Several customers have now dropped MAX from their references, including Air Canada and Ryanair, and American Airlines has removed the word MAX from the air safety cards placed at every seat, instead using the 737-8 designation.

It appears that airlines are skittish about the impact of using the MAX name, likely for good reason, as our sources indicate that market research about the MAX indicate high negatives after the two crashes and extended grounding. Airlines therefore don’t want to use the word MAX, and Boeing is likely to follow along with whatever the airlines want to call the airplane.


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