[UPDATED – more feedback]

It is useful to understand where we are on MAX orders, deliveries and operational fleet.  The grounding is having a big impact on Boeing but may be less of an impact among airlines than is first thought. But for some airlines, the grounding looks like a source of serious operational stress.

We estimate the following airlines are under the most operational stress from the MAX being grounded: flyDubai, Spicejet, Norwegian, TUI, Air Canada, SilkAir, Smartwings, Fiji Airways, Icelandair and Mauritania Airlines.

The big item here is time. How long before the grounding gets lifted? If the grounding takes more than a month, then our estimated stressed airline list grows.  Airlines have limited fleet reserves and they can only delay maintenance for a short while as regulatory demands are firm. Especially in this environment. Any fleet “slack” is a short-lived thing. Plus the summer travel season is coming. This is truly a time for Sleepless in Seattle. Given the decision by Canada to undertake its own separate certification of the MAX, time is not on Boeing’s side.  If other agencies in Asia and Europe make the same decision, the MAX is almost certainly going grounded outside the US for longer than it will be within the US.

The chart breakdown:

  • Customer – the list is in descending order of customer orders. Those customers in green have made public statements supportive of the MAX. Those in yellow have made public statements that question their future with the MAX.
  • % Order Delivered – as you get to the bottom of the table, note several customers have taken delivery of their entire MAX order to date.
  • Global MAX – this column shows the percent of the global operational MAX fleet.
  • MAX/Fleet – this lists the percent of the airline’s fleet tied up in MAX. Lessor fleets are all over so they cannot be calculated the same way. A red cell means that more than 10% of the airline’s fleet is tied up in MAX. We selected 10%+ as the number to draw attention to operational stress and made those red.

We polled several people across the industry to see if our 10%+ estimate is a reasonable number, and it appears that it is.  As one of our respondents commented: “That assumes slack and reserves cover 10% – that is approx correct but depends a lot on other operational disruptions and how long the grounding is as reserve also covers maintenance“. Another insightful response was: “10% is certainly a decent figure for, say, a 100 aircraft fleet. You’d need to source 10 replacements rapidly. With a 737, normally that would need some hard work but would be do-able. At 30 aircraft, you’d have to get 3 replacements in – normally easy enough on 737-size aircraft. Ring a couple of ACMI operators and job done. You might even get away with one of the larger E-Jets (if anyone is wet leasing them) and put them on routes which would suit them in your network, but for which you haven’t acquired them yourself because of the desire/need for a common/simplified fleet. However, in the current situation, when a whole batch of carriers is chasing NGs or even A320 family aircraft from ACMI companies, that changes the dynamic considerably. I think that 10% on even a 30-40 fleet would now be tough to cover swiftly.”

Cowen’s Equity Research team recently published this assessment: “Given the size of the American, United and Southwest fleets we expect those companies to have little issues adjusting schedules and backfilling aircraft with the B737-800s.” Helane Becker added in response to our 10%+ number as follows: “We estimate that at 5% and it’s really an issue.  Airlines have to scramble to rearrange their schedules so it’s becoming a problem. “

Chief Pilot: “Even a single aircraft being AOG is a source of operational stress. Many airlines operate with no operational spare, and these airplanes are scheduled for 12-16 hrs/day. So when you get to 10% of the fleet grounded, that will cause a huge hole in the operation and hundreds of flight cancellations. Also, tremendous stress with crew scheduling coupled with trip pairing issues. Tremendous loss of revenue from flight cancellations and crew pay protection for those canceled flights. You really appreciate how hard an airplane works on a daily basis.”

OEM Director: “A few months ago Southwest faced an abnormal level of maintenance activity. Their usual level of aircraft spares is typically around 2.5% (~20 a/c out of 750), but when recently they had 5% (45 a/c) of the fleet grounded for maintenance checks they said that it was starting to put stress on their operations. So the % could be actually lower than the 10% you are mentioning. Now it also depends on how the network is structured. SWA is not following a typical hub&spoke network structure and their level of experience could explain a lower % in their case. Also, airlines don’t use the same level of spares for new aircraft. The MAX and the A220 might not follow the same trend but still, airlines may not consider the MAX as an additional NG.”

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