Boeing’s plan to stretch 737 further leaves aircraft lessors cold

The US plane maker has been offering its planned 737 MAX 10X to companies, claiming it will be the most efficient single-aisle jet available, but it has failed to garner much interest.

The first Boeing 737 MAX 9 aircraft at the Boeing factory in Renton, Washington on Tuesday. Boeing's offer to build a longer version has been met with indifference by aircraft customers. Jason RedmonShow more

Major aircraft leasing companies have offered a lukewarm response to proposals by Boeing to build a bigger version of its 737 MAX family to counter the Airbus A321neo.

Boeing has started offering the model, code-named 737 MAX 10X, to airlines, saying it would be the most efficient single-aisle jetliner in the business – a claim disputed by Airbus.

Steven Udvar-Hazy, the executive chairman of Air Lease, who is regarded as one of the industry’s most influential voices, questioned the logic of adding a longer version of the slow-selling 737 MAX 9, which was rolled out on Tuesday.

“The question to ask is, would Boeing even be considering the [737] MAX 10, if it weren’t for the A321neo,” he said at the Istat Americas air finance conference.

“From all appearances, when you talk to airlines, the concept of another stretch to the 737 is really a reaction to the success of the A321neo. It is a way to protect some level of market share in that 200-seat-plus category.”

If, as expected, Boeing decides formally to launch the jet, which will be a longer version of the current 737 MAX 9, it would be one of five variants of the firm’s upgraded single-aisle 737 jet family.

By far the biggest-selling model is the 162-seat 737 MAX 8, the successor to Boeing’s hugely successful 737-800.

Several leasing company officials and other delegates at the conference, which can set the tone for new developments, said Boeing may penalise sales of its 737 MAX 9 with the new plane, but would struggle to dent sales of the A321neo itself.

“It is very hard to pick a winner out of those five shells, but there is no doubt they will cannibalise each other,” said Aengus Kelly, the chief executive of AerCap, the world’s second-largest lessor of 737 MAX jetliners.

“We think the MAX 8 will be a winner out of that family; with the others we have to be cautious.”

Boeing, however, used the annual Istat event to step up marketing for the 737 MAX 10.

It says that by stretching the 737 MAX 9 fuselage and adding 12 seats, it would match capacity of the A3212neo which carries 185 people or over 200 in denser configurations.

It would be available in 2020 and have more range than its rival, the Boeing marketing vice president Randy Tinseth said. Airbus executives denied this.

Industry sources say the 737 MAX 10 is a tactical response to the A321neo, pending a strategic assault that Boeing is weighing on the gap between single-aisle and twin-aisle jets.

* Reuters

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