Boeing's comeback depends on 737 Max's return, say analysts
BOEING's manufacturing might and financial recovery are riding on the comeback of the ill-fated 737 Max, which has been grounded after crashing twice killing 346 passengers and crew
BOEING's manufacturing might and financial recovery are riding on the comeback of the ill-fated 737 Max, which has been grounded after crashing twice killing 346 passengers and crew.
'Boeing's success in the 2020s rests in large part on reviving the 737 Max,' said JPMorgan Chase analyst Seth Seifman, reports Bloomberg.
The American planemaker may need to offer lower prices to preserve market share, even at the risk of cutting into its future profits, said Mr Seifman.
'If demand for air travel comes back relatively quickly on the back of effective vaccines then that should improve demand for 737s and help Boeing ramp up production,' he said.
Boeing's Max 8, the same version as the jets that crashed, commands 53 per cent of sales at the centre of the narrow-body, according to JPMorgan estimates. But Airbus dominates the other segments and controls about 60 per cent of the overall single-aisle market.
Boeing hopes to earn $12 billion by clearing its inventory of the 450 or so jetliners that it built during the grounding, said George Ferguson, an analyst with Bloomberg Intelligence. That's likely to take three or four years, longer than expected before the pandemic struck.
Boeing has spent more than $22 billion since the March 2019 grounding. The Max is also needed to fund development for the new narrow-body family Boeing will eventually need to counter the success of Airbus's A321neo, the largest single-aisle plane currently available.