ISTAT Online

Appraisal: Boeing 737 MAX 9

Photo Courtesy of Boeing

In October 2011, Boeing announced the fourth-generation MAX update to its then 50-year-old 737 family of narrow-body aircraft. This decision was controversial, as it meant Boeing would gamble on trying to squeeze whatever incremental performance improvements were left in its 1960s 737 aircraft design. Boeing opted for the MAX rather than completely surrendering the narrowbody market to the Airbus neo, while a new Boeing aircraft was designed and approved by the Federal Aviation Administration. But its efforts to meaningfully compete against a much more modern and soon-to-be-improved Airbus 320 family set off a series of events that, even in as late as 2025, continue to thwart Boeing’s efforts to compete in today’s narrowbody commercial aircraft market.

Ominously, the Boeing 737 MAX program suffered two crashes at airlines that were clearly not prepared to handle the introduction of an aircraft series before inevitable, new variant safety issues could be worked out. These two airlines had become early MAX customers mainly because of Boeing’s frantic efforts to overcome the two-year head start of the Airbus neo order book.

The MAX program then accelerated its descent as the subsequent mishandling of the aftermath of the two accidents resulted in the Federal Aviation Administration’s (FAA) grounding of all MAX aircraft. This grounding was followed by the COVID-19 pandemic’s labor and supply chain turmoil. All this allowed the MAX program to fall far enough behind the Airbus neo family that it will never surpass, or come close to matching, the total amount of neo aircraft deliveries.

The below chart does show one advantage for MAXs over neos, as Boeing managed to accumulate enough LEAP 1-B engines to ensure that all MAX aircraft are delivered with engines. Most of the above stored neo aircraft are (or were) awaiting engines at delivery.

More Program Challenges

It’s fair to say that going into 2024 and after firing and replacing CEOs, Boeing had regained some production rate stability, and the worst had to be behind the MAX program. But in January 2024, a panel covering an unused emergency exit blew out of a MAX 9 during an Alaska Airlines flight. Even though the pilots landed the aircraft safely, any thoughts of the FAA lessening its regulatory stranglehold on Boeing aircraft production rates and program approvals were immediately dashed.

So, as if the continued FAA delays on MAX 7 and MAX 10 certification were not enough program headwinds, 33,000 Boeing machinists went on a 53-day strike in September 2024. All the preceding resulted in the MAX production rate cap remaining at 38 per month, which, ironically, has actually supported MAX values by artificially limiting supply in an environment of persistent narrowbody passenger aircraft shortages.

MAX 9 Performance and Values

The MAX 9 was certified in February 2018 and matches the 737-900ER with a capacity of 220 passenger seats. Compared to the A320neo, the MAX 9 delivers up to 14% cheaper airframe maintenance costs, and because of its 3,300 nm range, competes in the North American passenger aircraft market extremely well.

The MAX 9 is an excellent example of a niche aircraft tailored to a particular (North American) market. Even a long European route, such as London to Istanbul, for instance, is only 1,552 nm, which makes the MAX 9 “overranged” for almost all European city pairs. Key North American operators are United with 103, Alaska with 78 and Aeromexico with 25, while Turkish Airlines and its impressive Istanbul hub operates only five MAX 9 aircraft.

So, in spite of enormous program challenges, lease rates and values should remain firm for MAX 9 aircraft. North American operators still prefer the range and economics of the MAX 9 and lease rates for later-year-of-build aircraft are in the US$350,000 to US$400,000 monthly range, exclusive of maintenance reserves. AAMI’s MAX 9 values are shown in the below chart.