Boeing
- The crash of Ethiopian Airlines Flight ET302 once again shines the spotlight on Boeing’s 737 Max program.
- It’s the second nearly brand new Boeing 737 MAX 8 airliner in recent months to be involved in a fatal crash.
- Airlines made the decision to ground their fleets of Boeing 737 Max airliners. Some safety regulators have outright banned the plane from entering its airspace.
- According to Moody’s, Boeing’s operating profit margin is $12 million-$15 million on every 737 Max it delivers.
Sunday’s crash of Ethiopian Airlines Flight ET302 once again shines the spotlight on Boeing’s 737 Max program.
The crash killed all 157 passengers and crew on board the four-month-old plane.
It’s the second nearly brand new Boeing 737 MAX 8 airliner in recent months to be involved in a fatal crash. In October, Lion Air Flight JT610 crashed in the Java Sea shortly after taking off from Jakarta, Indonesia, killing all 189 people on board.
As a result, airlines made the decision to ground their fleets of Boeing 737 Max airliners. Some safety regulators have outright banned the plane from entering its airspace. However, Boeing, the US Federal Aviation Administration, and its US operators stand by the airworthiness of the plane.
The Max is the fourth and latest generation for the Boeing 737 airliner. The plane’s importance to Boeing’s bottom line cannot be overstated.
"The 737 is very profitable to Boeing because of the high volume, the resulting production efficiencies and the amortization of the capital investment over the program’s decades," Moody’s said in a note on Wednesday.
According to the credit rating agency, Boeing’s operating profit margin is $12 million to $15 million on a dollar of sales for on each 737 Max 8 it delivers to customers.
"Boeing does not disclose specifics, but we estimate that the average operating margin dollars recognized for each delivery of a Max 8 aircraft at between $12 million and at least $15 million or more even at this point in the model’s life," Moody’s said.
Boeing was not immediately available for comment.
Boeing lists the 737 Max 8 at $121.6 million. However, according to industry research from Teal Group, buyers usually receive a 50% to 55% discount on the planes.
The 737 MAX is currently built alongside the previous generation 737NG (Boeing 737-600,700,800, and 900) at Boeing’s Renton, Washington factory.
By the end of 2018, Boeing ramped up production of the 737 to 52 aircraft a month. This year, it plans to produce 57 a month.
Last year, Boeing delivered 256 MAX aircraft to customers, representing nearly half of all 737 deliveries.
Boeing Commercial Airplanes, the company’s airliner division, has a backlog 5,870 planes valued at more than $400 billion.
As it currently stands, the 4,699 yet-to-be-delivered 737s represent 80% of that backlog.
More on Boeing’s 737 Max 8 and the Ethiopian Airlines disaster:
- Everything we know about Ethiopian Airlines’ deadly crash of a Boeing 737 Max 8, the second disaster involving the plane in 5 months
- Norwegian Air reportedly tells Boeing to ‘take this bill’ after grounding its fleet of 18 Boeing 737 Max planes
- This map shows all the countries to ban the Boeing 737 Max 8, and where airlines have grounded their fleets, after Ethiopian Airlines crash that killed 157
- Elected officials are calling on the US government to ground the Boeing 737 Max 8 after the plane was involved in 2 deadly crashes
- Boeing’s CEO reportedly asked President Trump not to ground the company’s plane that has crashed twice in 5 months
- Pilots complained to authorities about issues with the Boeing 737 Max for months before the deadly Ethiopian Airlines crash
- The US government says it has no reason to ground the Boeing 737 MAX that has crashed twice since October
- These airlines will likely take the biggest hit after the Boeing 737 Max was involved in two deadly crashes
- The Boeing 737 Max has come under fire after 2 deadly crashes in 5 months — but the aircraft is likely to be successful in the long-run, an aviation expert explains
- These airlines will likely take the biggest hit after the Boeing 737 Max was involved in two deadly crashes
- ‘You basically put a student pilot in there’: The copilot of crashed Ethiopian Airlines Flight 302 had just 200 hours of flight experience
- Boeing is going to update the control software on the 737 Max that may cause the plane to nosedive
- Boeing has $400 billion in orders on the books, 80% of them are for the 737
- ‘I don’t want Albert Einstein to be my pilot’: Trump says airplanes are becoming ‘too complex to fly’ as the UK, China, and other nations ground the Boeing 737 Max 8
- These are the victims of the Boeing 737 Max 8 crash in Ethiopia
- The family of Ethiopian Airlines Flight 302 captain speaks out after crash that killed 157 people
- A Georgetown University law student who reportedly expressed a fear of flying is among the 157 dead in the Ethiopian Airlines crash
- The black box from the crashed Ethiopian Airlines flight has been found
- An Ethiopian Airlines passenger said he missed the crashed flight by 2 minutes: ‘I’m grateful to be alive’
- People of 35 different nationalities were killed in the Ethiopian Airlines crash, including 8 Americans
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See Also:
- The Boeing 737 Max is embroiled in controversy after two deadly crashes in five months. Here’s how the plane came to be.
- The US government says it has no reason to ground the Boeing 737 MAX that has crashed twice since October
- These airlines will likely take the biggest hit after the Boeing 737 Max was involved in two deadly crashes
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Source: Business Insider – bzhang@businessinsider.com (Benjamin Zhang)