Premium 2018.2 – What is next for the 737 MAX7?

The 737 MAX7 is the least attractive member of the 737 MAX family.  It did not sell well initially, and even after Boeing redesigned it to add 12 seats, it hasn’t gained any market traction.  Even its largest customer, Southwest Airlines, has decided to up-gauge their orders to the larger MAX8 rather than take deliveries of the MAX7.  Even as the airline has kept buying used 737-700s from around the world.  Indeed, ~60% of that airline’s 737-700 fleet was sourced in the used market.

Of course, this is typical for the smallest models of narrow-body programs.  In the last generation of narrow-bodies, the A318 and 737-600 were also not well received in the market.  In the current generation, the A319neo and 737 MAX7 face a similar fate.   Aircraft that are optimized around larger seating capacity are typically heavier than they would need to be to compete well against aircraft purposely designed for a smaller seating range.  Today, that is the case with the C Series effectively replacing the A319neo at Airbus, and potentially the E195-E2 replacing the 737 MAX7 at Boeing

, should a proposed transaction between Boeing and Embraer be consummated.

The economics of the original 737 MAX7 was not strong enough to remain competitive in a 126 seat configuration, so Boeing increased seating to 138 passengers in order to improve seat-mile costs.  Unfortunately, both the 135 seat CS300 and 132 seat E195-E2 provide a double-digit improvement in seat-mile costs in that category, rendering the MAX7 effectively economically obsolete.