Boeing held its earnings call today, and the focus was, of course, on the MAX. While the quarterly results were terrible, Boeing’s estimate of just under $19 billion in additional costs from the MAX grounding and accidents indicate that the 1st quarter 2020 will also likely be quite negative.
David Calhoun indicated that from his discussions with customers, the business case for the MAX still made sense, and that its economics were sound. But what if that isn’t the case? What if passengers decided to avoid the MAX, and kept avoiding the aircraft. While Boeing
doesn’t have any alternative in the near term, as 2027 would likely be the earliest entry point for an all-new FSA (future small aircraft) to replace it, what would happen if the airplane lost popularity for the foreseeable future.
There are strong indications of negative sentiment towards the MAX. A recent survey for Bank of America showed that an overwhelming number of travelers would choose not to fly the MAX, and the CEO of AirLease, Steve Udvar-Hazy, advocated that Boeing change the name of the aircraft. He is one of the best informed in the industry, and his concerns merit attention.
Boeing held its earnings call today, and the focus was, of course, on the MAX.While the quarterly results were terrible, Boeing’s estimate of just under $19 billion in additional costs from the MAX grounding and accidents indicate that the 1st quarter 2020 will also likely be quite negative.
David Calhoun indicated that from his discussions with customers, the business case for the MAX still made sense, and that its economics were sound.But what if that isn’t the case?What if passengers decided to avoid the MAX, and kept avoiding the aircraft.While Boeing doesn’t have any alternative in the near term, as 2027 would likely be the earliest entry point for an all-new FSA (future small aircraft) to replace it, what would happen if the airplane lost popularity for the foreseeable future.
There are strong indications of negative sentiment towards the MAX.A recent survey for Bank of America showed that an overwhelming number of travelers would choose not to fly the MAX, and the CEO of AirLease, Steve Udvar-Hazy, advocated that Boeing change the name of the aircraft. He is one of the best informed in the industry, and his concerns merit attention.
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