Friday, June 11, 2021

Boeing Offloads Unclaimed MAX Jets as Air Travel Recovers

Plane maker has reduced inventory of jets whose original buyers walked away from their deals during the pandemic

The Wall Street Journal 
By Andrew Tangel and Alison Sider
June 11, 2021 9:05 am ET

A faster-than-expected recovery in domestic air travel is helping Boeing Co. find new homes for unclaimed 737 MAX jets whose buyers walked away or collapsed during the pandemic.

Some airlines are buying the orphaned jets amid a vaccine-fueled travel rebound in the U.S. and other parts of the world. The purchases have left the Chicago-based plane maker with around 10 stored MAX aircraft needing buyers, people familiar with the matter said. Last July, it counted around 100.

A year ago, airlines were parking planes in deserts and some permanently retired swaths of their fleets as they prepared for a protracted downturn. While many business travelers have yet to return and lucrative international routes are still on pause, domestic air travel has been on an upswing in recent months, U.S. airline executives say.

Flights in the U.S. are 84% full, on average, amid a surge of summer travel. The number of people passing daily through airport security checkpoints has neared 2 million recently—a level last reached in March 2020. While previous travel rebounds have been cut short by new waves of infections and restrictions, airline executives are more confident now that the recovery has begun in earnest and their finances have started to stabilize.

Carriers have responded by adding flights, making plans to bring back idled crew and hiring new pilots and flight attendants. They are also starting to expand their fleets.

Major U.S. carriers such as United Airlines Holdings Inc. and Alaska Air Group Inc. are among recent buyers of the unclaimed MAX planes. The jets are often referred to as white tails, an industry term for those that aren’t painted in airline colors. The MAX jets in question need to be repainted with their new owners’ liveries.

United said the carrier’s earlier order for 25 MAX jets, announced in March, includes planes from Boeing’s built inventory as well as planes to be produced later. An Alaska Airlines spokeswoman said nine MAX jets it secured in a December deal had been built for other carriers.

Separately, United has been in talks with Boeing about a potential order for as many as 150 additional jets, people familiar with the matter said.

Newer entrants such as Canadian discount carrier Flair Airlines Ltd. are also spurring demand.

Flair Chief Executive Stephen Jones said the 13 previously unclaimed MAX planes the carrier is adding to its fleet will help fuel its growth, aimed at capturing demand as travel recovers. Rather than wait two years or more after placing an order for new planes, Flair can take delivery in a matter of months, he said.

“We can get started very quickly,” Mr. Jones said.

Some Boeing customers are likely to face supply constraints this summer, CEO David Calhoun said earlier this month. He called the recovery “more robust than I ever imagined.”

Southwest Airlines Co. said this week that by August, it will be flying roughly as much as it did in the same month in 2019. The airline has added 18 new destinations over the course of the pandemic, including the Thursday announcement of flights to Syracuse, N.Y., this fall.

On Tuesday, Southwest said it would increase its order for a new, smaller version of Boeing’s 737 MAX by 34 planes next year, accelerating plans it unveiled in March to refresh its all-Boeing fleet.

The number of Boeing’s unclaimed MAX aircraft is fluid as airlines in the U.S. and a few other parts of the world increase flying and add to their fleets. Customers typically pay the bulk of a plane’s purchase price at delivery.

The development is helping Boeing move past the pandemic and financial consequences related to two earlier 737 MAX crashes. Some customers have been able to walk away from their newly produced planes without penalties after regulators grounded the aircraft for nearly two years.

Boeing’s push to stop bleeding cash depends heavily on delivering more MAX jets, having delivered about 100 to airlines since December. It had about 400 MAX jets in its overall inventory at the end of March, according to a securities filing. Most delivered jets have gone to U.S. airlines and lining up additional customers for unclaimed planes will help it reach the goal of generating cash next year.

A Boeing spokeswoman said the plane maker was grateful for its customers’ continued confidence in the 737 MAX.

Boeing’s ability to find homes for the MAX jets also highlights the airline industry’s two-speed recovery. High vaccination rates in the U.S. and China helped domestic traffic recover to pre-pandemic levels. The two countries account for two-thirds of the global traffic rebound from last year, according to the International Air Transport Association, a trade group. Airlines in Europe and most of Asia, meanwhile, are struggling to find passengers.

—Doug Cameron contributed to this article.


  1. I notice that no US domestic carrier (Southwest, American Airlines, United) had any reported issue with operating the MAX while two other carriers had the fatal crashes.

    It matters far more with whom you fly, that what you fly on.

    1. The crew responses to the runaway trim events in the two accidents are detailed in the 2019 article "What Really Brought Down the Boeing 737 Max?" by William Langewiesche.

      The article is behind a NYT paywall - the TL:DR takeaway includes the unfortunate circumstance in the first accident where the previous day's flight from Bali had dealt with the same anomaly but no repair was made and the accident crew was not made aware, while the second accident happened after notifications were made to airlines about the problem and how to recognize and respond.

      MCAS needed some design improvements, but crew response, the "with whom you fly" was key in those accidents, for reasons well-detailed in the Langewiesche article.

    2. Very true, there was a massive pilot shortage before the pandemic and many 3rd world airlines were employing pilots and captains who had very little to no training on these planes. Lets not forget that when these crashes happened Southwest lobbied to continue to fly these because they knew who was at fault in those crashes.

    3. Let's also not forget that these non-Western airlines don't have first class training by Western standards. Compounding that is these inferior trained green pilots relying heavily automation to get from A to B, and when something goes wrong or they have to manually take over, they lack stick and rudder skills.

      The most recent eye opening case was the Asiana Airlines 777 crash into SFO on approach. Case in point on one of the contributing factors to the crash as reported by the NTSB where the captain reported over 10,000 hours but only had a 44 hours in the 777:

      "The complexities of the autothrottle and autopilot flight director systems that were inadequately described in Boeing's documentation and Asiana's pilot training, which increased the likelihood of mode error"

      The FO had over 3,000 hours right seat in the 777 but still didn't know how to get them out of the situation or do his job as the PM when the captain was flying??? Anyone ever heard other pilots complaining about any "inadequate" autopilot/autothrottle coupling to the flight director? Anywhere else in the world? Yeah me neither. I asked my neighbor, a Delta 777 retired check captain, if he ever heard complaints of any confusion in the manual. Nope.

      My guess is that Boeing knew they were going to get blamed for which was a design mismatch between the new engine placement and FMS software. Was that mismatch enough to bring a perfectly good flying plane down? Not in the hands of competent pilots. It was a totally unnecessary grounding costing billions to both Boeing and the airlines...all because of two inferior air crew in other nations which happened to be non-Western non-wealthy nations (pressure guilt trip).

    4. What is so difficult to understand about someone not knowing how to use a machine, put a 10 year old behind the wheel in your car and tell them to drive on the highway, is that KIAs fault if they crash and kill someone? If you think the MAX crashes are bad look at how many accidents that part of the world has in smaller jets, turbo props and general aviation planes and experimental aircraft it's beyond shocking.

    5. Speaking of Southwest, this is a great read about their founding and the bitter rivalry with Braniff. My favorite line:

      “Get ready,” Muse said to his smiling hostesses, each of whom was clad in her in-flight uniform of tangerine knit top, slouchy white belt, white side-laced go-go boots, and fire-orange hot pants. “Now, everyone flip Mr. Lawrence the finger.”

    6. I mean, what does it matter if people die in other countries due to a flawed system from the largest American airplane manufacturer, a national darling? As long as Americans aren't dying, why should we care if their greed and ignorance kills hundreds if not thousands!