Why airlines are so eager to get the Boeing 737 Max back in the air despite customer concerns
The Boeing 737 Max is set to return to service in the US next week with airlines rushing to get the plane back in the air, take deliveries of delayed orders, and place new orders, despite customer skepticism.
Airlines want to operate the aircraft because it can help guard against rising fuel prices to keep costs low, especially during the pandemic recovery.
History has shown the public doesn't remember airplane troubles if the once-grounded Boeing 787 Dreamliner and Douglas DC-10 is any indicator.
It's been less than six weeks since the Boeing 737 Max was ungrounded by the Federal Aviation Administration and the plane is already flying passengers around Brazil and Mexico, with plans to start in the US in just seven days.
American Airlines will fly the aircraft first, following by United Airlines in February and then Alaska Airlines and Southwest Airlines in March. Brazil's Gol Linhas Aéreas began flying passengers on the aircraft on December 9, just three weeks after the FAA's ungrounding, and Aeromexico soon followed suit on December 21.
But while airlines are rushing to get their newly-ungrounded planes flying again, take delivery of their delayed orders, and place new orders for more models, customers are skeptical about stepping back onboard a plane that hasn't flown passengers in 21 months and killed 346 people.
A Business Insider survey in March 2019 following the crash of Ethiopian Airlines flight ET302 revealed more than half of respondents would not fly on the plane. And that was before the public got a glimpse at the aircraft's certification process and Boeing's deception to regulators and customers, especially regarding the installation of the faulty software that led to the crashes.
Airlines, however, have been waiting for the moment for nearly two years and are eager to put the grounding behind them.
Here's why airlines are rushing to get the Max flying again after a long grounding.
Fuel costs are on the rise
A key selling point of the Max is its fuel-efficiency as a hedge against rising fuel costs, which can be a killer for airlines. The past few years have seen a reprieve from high jet fuel prices but countless factors such as geopolitical showdowns, as we saw between Russia and Saudi Arabia in the early days of the pandemic, can drive oil prices way down or way up, at a moment's notice.
"There is a concern that fuel prices are nudging upwards again, and might go higher again with the recovery," Richard Aboulafia, vice president of analysis at Teal Group, told Business Insider.
A fuel-efficient fleet can help keep costs low, especially during the recovery when every penny saved will help airlines regrow their depleted flying schedules and hire back more workers. Alaska Airlines cited a 20% increase in fuel efficiency from its Airbus A320 to its soon-to-be delivered Boeing 737 Max 9s, while also carrying more passengers.
It's good for the environment and for the bottom line.
Boeing needs to sell more planes
Airlines are also showing that they can't pass up a good deal, even if for a troubled aircraft. Boeing still has a product to sell and every Max sold goes further to restore confidence in the jet so good prices can be had, Aboulafia said.
Orders have been coming in since the ungrounding with Ireland's Ryanair placing an order of 75 aircraft and Alaska Airlines adding a total of 36 additional aircraft in a two-order deal with Air Lease Corporation and Boeing in December.
Boeing not only has to sell new builds but also aircraft that were built and never delivered to a customer, known as "white-tails," since the combination of the grounding and the pandemic led to increased cancellations. Alaska Airlines not only announced a 23-aircraft order on Tuesday, growing its firm order total to 68 jets to be delivered by 2024, but also opted for nine white-tails.
Southwest Airlines was also reportedly in talks to acquire white-tails and will take on 35 Max aircraft in 2021. Despite having the largest Max fleet in the US prior to the grounding, Southwest will be one of the last airlines in the US to fly the Max, waiting until at least March before putting passengers on the aircraft.
Ripping off the bandage
American is starting the jet from its Miami hub in a region that's seen increased demand during the pandemic, which Aboulafia says may be the reason the airline wants to begin flying it again so quickly. While starting on the popular Miami-New York route, the aircraft will soon be expanded across American's route map from Miami to destinations like San Juan, Puerto Rico; St. Thomas, US Virgin Islands; and Washington, DC.
And the sooner the jet becomes widespread again in the US, the sooner the public can forget about the two crashes its once-faulty software caused, if history is any indicator.
As Aboulafia noted, the Boeing 737 Max isn't the first aircraft to be grounded after high-profile incidents, not even the first in the 2010s as the Boeing 787 Dreamliner was briefly shortly after its debut.
The Douglas DC-10 also came to mind as the aircraft had a long flying career despite a high-profile incident. A United Airlines flight operated by the aircraft famously crash-landed in Sioux City, Iowa, resulting in over 100 fatalities, just under a third caused by the 737 Max.
And despite the following grounding by the FAA, the DC-10 was still flown by passenger airlines for decades and still flies packages today for FedEx Express. A military variant also still flies for the US Air Force as an aerial refueler known as the KC-10 Extender.
But the name "737 Max" has become synonymous with safety concerns as the two crashes and the subsequent grounding were global news, with President Donald Trump even chiming in on its grounding in March 2019. Some in the traveling public are vowing not to fly on the plane once it returns to service, despite the strenuous recertification process.
And there's good reason for skepticism as employee email and chat transcripts revealed how Boeing mislead customers and regulators, calling one airline "idiots" for recommending additional training, and a recently released US Senate report criticized aspects of the recertification process.
All US airlines flying the Max are touting the aircraft's safety while simultaneously vowing to give customers flexibility when booked on the Max to move to another flight free-of-charge if they so desire. But travelers will have to know they're flying on a Boeing 737 Max first.
"The world is kind of divided evenly into people who can't tell one type of 737 from another, and those that can," Aboulafia said. "But if they know that, they also know that this is the single most scrutinized jet in history."
A more recent example comes from the early days of the airline industry's pandemic recovery with the onboard social distancing debate.
American Airlines and United Airlines were criticized for filling their planes to capacity so early on but just a few months later, airlines that did block seats are now reverting back to full flights. Southwest Airlines and JetBlue Airways, for example, announced their new plane-filling policies before the first COVID-19 vaccine cleared emergency authorization.
The public soon forgets the headlines and time is a healer. Five years from now, Aboulafia says the Max troubles will be "absolutely long forgotten."
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