The idea that Boeing can afford to ditch the 737 MAX program is perhaps the stupidest assertion I have ever read. I decided to do a little math based off of the little public information availible:
The development cost of the 737 MAX program was 1.8 billion dollars. Boeing have sold 387, all at a list price of between 100 million-134 million. But airplanes seldom sell for list price, in fact they sell far below list price. Let’s assume that each 737 MAX sold for around 50 million based off of this article from 2009 showing that American paid roughly half price for 737 NGs:https://blog.seattlepi.com/aerospace/20 ... 2-million/
The result is that Boeing has made 19.5 Billion dollars on the program from airlines. Do you think airlines are going to let that money go if Boeing cancels the MAX program? Absolutely not. They will want every penny back, PLUS additional compensation. Boeing also has 400 737 MAX’s sitting around in Arizona, Renton, Seattle and Everett. None have been delivered, so none have made Boeing any money. I have no access to data with regards to how much it costs to build a 737 MAX, but I am going to assume it is around 10 million dollars. 787*50 million is roughly 19.3 billion dollars. Every penny sent straight to the scrapyard.
I know what you are thinking: “Well, airlines could just order the NSA, they will sure be happy to pick it up”. There is absolutely no way Boeing can develop the NSA in less than 5 years. Don’t forget how much money the program is going to cost to develop. And since the 737, Boeing’s main cash revenue, is gone, Boeing won’t have much money to develop the NSA. Guestimating from the 787 development cost, being EXTREMELY optimistic, I would guess NSA development cost would be at least 15 billion dollars. Add that to the debt pile. Also, the FAA is going to be in no hurry to certify the NSA, seeing as the last time they rushed the process, hundreds died. In all the time it will take Boeing to develop the NSA, the airlines aren’t going to sit on their hands and wait: There are a lot of 737 NGs needing replacement. You know what product can replace them? Bombardier C-Series and A320NEOs of course! Airlines aren’t going to do Boeing a favor: Airbus will likely provide great pricing, and airlines will have a brand new type in their fleet. And just like that, most of the 737NG replacement market (The main market for the 737 MAX and NSA by the way) is gone.
Well, it’s here: The Boeing 797 NSA. Now Boeing can take back some market share, since Airbus will have been doing nothing in the last five years.
Oh right. Airbus WILL be doing something if Boeing is developing an NSA. Maybe we will see an A220-500 and A220-700 stretch for the lower range market, and a rewinged A320 and A321 for the mid to long range market. Speaking of which: There goes the market case for an NMA assuming the A320 is still efficient enough. But why go down the path Boeing went on? Why not make a new aircraft entirely. And just like that, Airbus is now competitive with Boeing, and what has already become a drastically shrunk market for Boeing just shrunk in half.
Did I mention that the 737 is where most of BCAs profits are? So in the 5 years Boeing has had no narrowbody aircraft, their stock price would have been in freefall. Which means less money to fund NMA.
Lets do some math now: 19.3 billion dollars spent physically building the aircraft. 19.5 Billion refunded to airlines. 15 Billion spent on developing a new aircraft. Boeing has now lost 34 BILLION DOLLARS. This does not factor loss of stock price, loss of investors, loss of consumer trust, reimbursement costs, and loss of market size.
At the moment, assuming the 737 MAX flies again this year, Boeing are set to loose 9.2 billion.https://qz.com/1734220/the-737-max-has- ... -counting/