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Boeing rolls out the 737 MAX 7

On the 5th of February, Boeing rolled out the smallest variant of the Boeing 737 MAX

On paper, the Boeing 737 MAX 7 replaces existing Boeing 737-700 aircraft in service. Boeing received orders for 1,164 Boeing 737-700 aircraft and has a backlog of just 4 aircraft. So, on paper the replacement potential is big. Also, if we look at the active fleet of 1,135 there seems to be a bright future for the Boeing 737 MAX 7.

While there is a big installed base for the Boeing 737-700, there are several factors that limit the appeal of the aircraft. One of the most important reasons is that with growing demand for air travel the sweet spot of the single aisle market is shifting. That sweet spot has shifted towards 160 seats in recent years and it is likely that growing demand for air travel will move that sweet spot towards 180-200 seats in the future. So, in essence a growing market is good but it puts some pressure on existing smaller aircraft.

What also pressures the prospects for the Boeing 737 MAX 7 is the fact that Boeing focused the process of MAX’ing the Boeing 737 on getting the most efficiency for the Boeing 737 MAX 8 design. With the core of the market being at the spot where the Boeing 737-800 is active, Boeing chose to optimize its design for that particular market spot for obvious reasons. The result is that the smallest member of the Boeing 737 family, already not favored by airlines is becoming less efficient as it carries the advanced winglets and turbofan sized for its bigger brother, the Boeing 737 MAX 8.

On customer demand, Boeing has made the new Boeing 737 MAX 7 slightly more efficient by adding more seats to the aircraft. Boeing chose to turn the aircraft into a shrink of the MAX 8 instead of a stretch of the original MAX 7 adopting the strengthened wing and landing gear allowing more fuel to be carried boosting the range of the aircraft.

Back in 2016 when Boeing announced the changes, it said that the changes were driven by customer demand and that it did not expect the changes to the Boeing 737 MAX 7 to spark a lot more orders. Given the trade dispute between Boeing and Bombardier this is quite an interesting statement that Boeing likely regrets now. It is highly likely that Boeing recognized that a 130-seat MAX 7 would be extremely inefficient compared to what Bombardier and Embraer could offer as competing products.


The 2 things that make the Boeing 737 MAX 7 less preferred are the growing demand for air travel which clearly favours aircraft the size of the Airbus A320neo and Boeing 737 MAX 8 and the MAX 7 inefficiency compared to competing developments. Boeing partly addressed that problem by turning the aircraft from a 130 seat aircraft into a 140-seat aircraft.

What Boeing likely did predict correctly is that the changes to the Boeing 737 MAX 7 would not generate many more orders for the aircraft.

Southwest Airlines (LUV), the biggest operator of the Boeing 737-700 operating over 500 aircraft did not commit to any more Boeing 737 MAX 7 aircraft after the redesign was announced back in 2016. In fact, the MAX 7 gathered no orders since WestJet ordered the aircraft back in 2013 and Southwest Airlines even ended up deferring some of its MAX 7 orders.

The small number of units ordered by Southwest Airlines really shows that there is little to no demand for the Boeing 737 MAX 7 at this point. Initially Southwest was scheduled to take 15 aircraft in 2019, 14 in 2020 and 1 in 2021. At the start of the year Southwest Airlines firmed options for 40 aircraft while simultaneously deferring 23 out of the 30 MAX 7 aircraft it ordered beyond 2023-2024.

If the biggest operator of the Boeing 737-700 ordering only a relatively small set of MAX 7 aircraft didn’t say enough about demand for the aircraft, deferring and firming options for the bigger variant certainly does one would think.

The second biggest customer for the MAX 7 previously converted orders to the bigger MAX 9 variant and has the flexibility to convert existing orders as well.

Canada Jetlines has purchased 5 Boeing 737 MAX aircraft and has additional options for 16 more including the possibility to convert to the bigger Boeing 737 MAX 8.

The backlog for the Boeing 737 MAX 7 is small and I can imagine that airlines are seriously considering not placing any follow up orders or covert to MAX 8 orders where deemed suitable.

Though it seems unlikely that the MAX 7 will become the backbone of the Southwest Airlines fleet, it should be noted that the airline currently operates over 700 aircraft and has roughly 250 aircraft on order. So to replace the Boeing 737-700 fleet, more orders are needed and it is highly likely that the order for 30 jets is an order to prevent Boeing from axing the MAX 7 altogether or not even launching the MAX 7 in the first place. By doing so, Southwest Airlines has the possibility to select any of the 4 single aisle Boeing MAX members or shop on the second hand aircraft market to support its network and fleet replacement program. It is very important to note that the oldest Boeing 737-700 Southwest currently operates is 21 years old, which means that there are at least another 4-5 years until a typical retirement age is reached. Some of the early retirements -700 could be replaced by the additional MAX 8 aircraft that have been firmed up meaning that there is no direct pressure on Southwest Airlines to commit to Boeing 737 MAX 7

Could Boeing have known that the MAX 7 would not sell? The short answer is: Yes. The smallest members of aircraft families tend to be slow sellers. This holds for previous Boeing 737 generations, for the Boeing 787 and for the extended range variants of the Boeing 767 and Boeing 777. Airbus is more or less seeing the same problem on the Airbus A320 families and the Airbus A330neo. It basically is in the nature of aircraft design that stretches of existing designs tend to be more efficient and offer a more compelling value proposition for airlines.

Business jet market

Is it all that bad for the MAX 7? No. The prospects of the Boeing 737 MAX 7 are grim, but the Boeing 737 does not just serve the commercial airline aircraft market. The Boeing 737-700 is used as the base for business jet variants. The market for business jets is tough. What generally holds for the segment is that capability goes over costs. During the financial crisis of 2008, the market for business jets collapsed.

Currently some new designs and stretches are around the corner and the range capability is moving towards 7,000 nautical miles. The dedicated business jets such as the G650 and the Bombardier Global 7000 can fly over 7,000 nautical miles. The Boeing 737 MAX 7 BBJ, the BBJ1 MAX, would also be able to fly roughly 7,000 nautical miles. It would still be significantly heavier than a business jet, but as mentioned the business jet market tends to be driven by capability rather than costs. Compared to the Airbus A319neo business jet, the ACJ319neo, the BBJ1 MAX flies several hundreds of nautical miles further.

Military derivatives

Talking about the Boeing 737-700 for military purposes, likely the Boeing C-40 Clipper comes to mind which is an aircraft based on the Boeing 737-700. Military aircraft usually stay in service longer than aircraft in commercial service, so there likely won’t be a lot of demand from defence side for the Boeing 737 MAX 7 to replace existing aircraft, since most of the aircraft delivered to military customers are relatively new.

Boeing has already based the JSTARS replacement on a Boeing 737-700 aircraft, but the future of the JSTARS recap program is in doubt. The AWACS are relatively new meaning that there is no need for replacement just yet. The Clippers are relatively new as well so no need for replacement just yet.


Low sales for the Boeing 737 MAX 7 fit the trend. By making the Boeing 737 MAX 7 a shrink of the MAX 8 instead of a stretch of the MAX 7, Boeing has intentionally edged the Boeing 737 MAX 7 out of a spot where it could not compete on the commercial aircraft market. Though it is not expected that this will significantly add to the appeal of the aircraft, Southwest Airlines as the biggest operator of the Boeing 737-700 could still be very willing to consider the MAX 7 years from now. The average fleet age of the -700 fleet for Southwest is 13.7 years, which means that currently there is no urge to order a replacement for these aircraft and I think that is one of the main things that currently is reflected in the order book as well as the decision to defer deliveries..

Another important reason for Boeing to redesign the Boeing 737 MAX 7 could be to remain competitive on the business jet market at relatively low cost. The Boeing 737 MAX 7 will be able to move along with the trend of having a range capability of 7,000 nautical miles and when this market flourishes, it is an extremely attractive market to be active in and worth taking the pain of having an aircraft that does not sell in the commercial space.

The Boeing 737 MAX 7 is a non-event, pretty much until the business jet market flourishes or Southwest finds out that Boeing 737 MAX 7 does a good job in their fleet. When and if that happens, Boeing will be more than happy that it did not kill the aircraft altogether and that it redesigned the aircraft instead. It’s an extremely small risk the jet maker can take over the back 4,000+ Boeing 737 MAX sales.


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