Boeing Co.’s troubled 737 MAX airplane, one of its most popular models prior to two fatal crashes that killed 346 people almost two years ago, is on the verge of being recertified to fly by the Federal Aviation Administration.
Industry observers say the final decision could come as early as this week after FAA Administrator Steve Dickson said last week that the agency was “at the finish line” with the process.
But two big questions remain.
Will passengers get on the beleaguered plane? There certainly will be some trepidation on the part of fliers, to the point where American Airlines offered tours of the 737 MAX and conference calls so the public could talk with pilots for some reassurance.
But even before that happens, one other question must be answered: Which airline is going to pull the trigger on buying and utilizing the 737 MAX?
Boeing has what is known in the industry as a ‘white-tail problem.’ That is, the company has more than 100 of the jets that have been already bought and assembled but have lost their original buyers.
According to the respected financial publication The Motley Fool, most airlines have far more airplanes on order than they will need over the next few years, making it hard to drum up new orders. But with the 737 MAX potentially just days away from recertification, clearing the backlog of undelivered jets will be a top priority for Boeing as it looks to stem its cash burn.
The problem is, the continuing coronavirus pandemic has all but decimated the aviation industry, with fewer flights and far less capacity, making the need for inventory a moot point. Nonetheless, Boeing presses on as it speaks with Delta, United, Southwest and Alaska airlines – the four major domestic carriers that use the 737 MAX – about purchasing more of the planes.
But according to The Motley Fool, Boeing hasn’t delivered any 737 MAX jets since the fleet was grounded globally 20 months ago. However, for the last 10 months of 2019, the company continued building the 737 MAX at a high rate, expecting a quicker turnaround on being able to fly again.
Obviously, that didn’t happen.
Now what will likely happen is Boeing offering the 737 MAX at a huge discount. Normally that would make these white-tail planes attractive the airlines but, again, we’re in the midst of a pandemic that is only starting to heat up again with a surge of cases across the world. Whether Boeing is able to turn around some of these planes remains to be seen.
