The Most Important Story in Airlines in 2021

Sometimes the daily news cycle, even in a specialized beat like the airlines, can cloud what really is the most important story in the industry, especially in a year still upended by the pandemic. Sure, vaccine mandates, and the ever-elusive return of business travel are important to cover. But the most important, the one that will have the longest-lasting impact on the industry as it climbs out of the pandemic is the resolution of a story that started before Covid-19: The Boeing 737 Max.

The plane had just returned to the skies in the U.S. and a few select countries at the beginning of the year. In fact, there were only 46 Max-operated flights globally on January 1, 2021 — a fraction of 1 percent of global flight activity — according to Cirium schedules. And that left airlines with a lot of unknowns: Would travelers return to the jet? And, could carriers bet on aircraft for their planned summer schedules and ambitious climate goals?

A bit of a refresher. The 737 Max was grounded in March 2019 after fatal crashes in Indonesia and Ethiopia killed 346 people. The accidents eventually were linked to the airplane’s flight control software, and Boeing came under fire for taking shortcuts in developing the plane. After Boeing modified the software, the U.S. Federal Aviation Administration (FAA) re-approved the plane in November 2020. Regulators around the world followed suit throughout this year, the largest holdout being China, which has signaled it will re-certify the aircraft in 2022.

Airlines were quickly reminded of why they ordered thousands of Maxes in the first place. The aircraft, a re-engined version of Boeing’s venerable 737 family that dates to the 1960s, is as much as 25 percent more fuel efficient than its predecessors, which makes it cheaper to fly and much more sustainable. It also has a longer range and can carry more weight than the Next Generation 737s that it would replace. And crucially, training costs for pilots, even after the new flight control software and training requirements figured in, are much lower than they would have been with a totally different airplane. This let airlines that were already big 737 operators slot in the aircraft with minimal disruptions to their schedules and crew rosters.

Although large aircraft like the double-deck Airbus A380 with their plush first-class seats and onboard showers capture the imagination, it is small, single-aisle aircraft of 150-200 seats that are the industry’s workhorses. They make up the largest part of airlines’ fleets and carry most passengers. So any gain in efficiency — whether fuel burn or costs saved in crew training — is money in the bank for airlines. This is why so many carriers, like Southwest Airlines and Ryanair, scrambled to order as many Maxes as they could.

Airlines breathed a collective sigh of relief when the Max returned to the skies. After Brazilian carrier Gol was the first to place it back in revenue service, the floodgates were opened with American Airlines, United Airlines, and Southwest all joining them in subsequent months. But pundits wrung their hands, predicting that passengers would be too scared to fly on the aircraft. Nearly every airline that operates the Max went so far as to offer passengers the option to change their flights if the aircraft made them nervous.

And then, nothing. A handful of flyers told TV cameras that they booked away, but by and large, the flying public just didn’t care. And that was a much needed shot in the arm for airlines already reeling from the pandemic.

Pundits and analysts also said the Max’s grounding would be a blow Boeing could never recover from. And although Boeing suffered severe reputational damage, was scolded by Congress, and took a multi-billion dollar financial hit, the airframer survived.

And in fact, Boeing thrived. As soon as the dust settled and it was clear that passengers would fly on the plane and regulators everywhere would eventually certify it, the orders started pouring in. Aeromexico, Alaska Airlines, Gol, Ryanair, Southwest Airlines, and United are among the airlines that have committed billions of dollars to hundreds of additional Maxes since the FAA lifted the grounding. Even Delta Air Lines, which had never flown the plane, has said it is considering the aircraft.

Boeing’s problem now is actually not being able to build and deliver the planes fast enough. The manufacturer is steadily working through the number planes it couldn’t deliver during the grounding, and is ramping up production from 19 aircraft per month to 31. It expects to deliver more than 500 Maxes next year, both from its inventory and new-build aircraft. And orders for a Max placed now won’t be delivered for several years, due to the backlog.

In other words, Boeing, which already is dealing with problems delivering 787s as well as production delays to its 777X program, is likely to struggle with a good problem: Too many orders for the Max, rather than too few.

All of this occurred against a pandemic that has battered the airlines, and with the ongoing threats of new variants and fresh outbreaks. But the Max’s successful return to flight signaled a rare bit of good news for the industry. But more importantly, for airlines, the Max is a crucial piece of hardware to rebuild and to meet their environmental goals, thanks to its fuel efficiency, as they eye their post-pandemic futures.

Skift Senior Airlines Reporter Edward Russell contributed to this report.