Boeing Newest 737 Max Makes First Flight Into Cloudy Market

(Bloomberg) -- Boeing Co.’s newest and smallest 737 Max jetliner took flight for the first time, into blue skies -- and a cloudy, crowded market.

Boeing Newest 737 Max Makes First Flight Into Cloudy Market

The takeoff, at 10:17 a.m. Friday by Boeing’s factory outside Seattle, was characteristically drama-free for the third of four planned models in the Max family. The plane touched down at Boeing Field at 12:59 p.m.

Boeing’s latest upgrades of its 737, which dates to the mid-1960s, have largely met milestones on a schedule plotted years ago even as the manufacturer pushes single-aisle output to record highs.

But prospects for the new aircraft -- the Max 7 -- are hazy. Sales have flagged as low-cost carriers migrated to larger, more economical models. Even Southwest Airlines Co., the launch customer for the Max 7 and largest operator of the 737-700, the jet’s predecessor, is part of the trend. The Dallas-based carrier has ordered 30 Max 7s, and 210 of its larger sibling, the Max 8.

Chicago-based Boeing responded to the Max 7’s two biggest customers, Southwest and Canada’s WestJet Airlines Ltd., by stretching the narrow-body plane’s airframe to seat 138 people, a dozen more than originally planned. The new model also flies farther than other Max models or its competitors. With a range of 3,850 nautical miles, the new jet should be able to fly directly from Dallas to Honolulu.

Competition is fierce. New models from Brazil’s Embraer SA and Canada’s Bombardier Inc. are jockeying for sales in the same sliver of the market: jets that seat between 130 and 150 travelers. France’s Airbus SE has all but conceded sales for its A319neo as it prepares to take control of Bombardier’s C Series through a joint venture forged last year.

ModelSeat CapacityRange (nm)
Boeing 737 Max 7138-1723,850
Airbus A319neo140-1603,750
Bombardier CS300130-1603,300
Embraer E195-E2120-1462,600

Boeing has lined up eight customers for its model so far, including China-based Ruili Airlines, although it won’t reveal sales totals, Jeff Haber, a Boeing regional director of product marketing, told reporters Friday. The Chicago-based manufacturer plans to target airlines that need superior engine performance for steamy climates or high-altitude airports -- and will conduct its so-called “hot and high” testing for the Max 7 in China.

The flood of new planes might eventually rekindle airline interest in the category, especially if fuel prices rise, said Richard Aboulafia, aerospace analyst with Teal Group. 

“It could be the Max 7 stays in a small niche,” he said. “Or maybe the Embraer and C Series jets stimulate the 130-seat market. It is a notch up from the no man’s land of 100-seaters.”

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