Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why the New 737 MAX Is a Problem for Embraer SA

Embraer SA (NYSE: ERJ  ) has spent years trying to convince mainline carriers that its E-jets are as capable as Boeing (NYSE: BA  ) aircraft when it comes to serving mid-range routes. The new 737 MAX 8 could make it harder for Embraer to win that argument, Fool contributor Tim Beyers says in the following video.

At the recent Farnborough Air Show, Boeing talked up the MAX 8, a high-capacity variant of the 737, capable of seating 200. That's a big boost when you consider that most comparably sized 737 aircraft top out at 175 passengers. Even the models flown by the sardine squad at Europe's Ryanair top out at 189.

It was only last year, at the 2013 Paris Air Show, that Embraer introduced its new "E2" version of the E-jet family, including a modified E195 jet capable of ferrying as many as 144 passengers in a high-density configuration. That's more than the majority of 737 aircraft flown by Southwest Airlines, whose 737-700 jets seat between 137 and 143 passengers.

To be fair, we've yet to see a rush of firm orders for the "E2" version of the E195 jet. Boeing's high-capacity Max 8 could keep it that way, Tim says. There's no reason to go for a smaller aircraft if a bigger one will ferry more passengers with as much, or more, efficiency.

What to do if you're an investor? The expanded MAX won't be in service anytime soon, so there's no reason to sell. And yet, it's probably a good idea for investors to compare the order books for both Boeing and Embraer. If E2 demand starts lagging as firm orders for the Max 8 roll in, it may be time to reevaluate Embraer stock.

Down-to-earth stocks with soaring profit potential
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 20, 2014, at 7:23 AM, Mathman6577 wrote:

    Good article.

    The industry trend within the same class of aircraft does seem to be towards more seating capacity (i.e. A321 over A320, 787-9 over 787-8. etc.). The bigger Max versions will probably be a good seller for Boeing (and GE).

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3035287, ~/Articles/ArticleHandler.aspx, 9/1/2015 4:27:59 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Tim Beyers

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at or send email to For more insights, follow Tim on Google+ and Twitter.

Today's Market

updated Moments ago Sponsored by:
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASD 4,636.11 -140.40 -2.94%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 4:02 PM
ERJ $24.33 Down -0.95 -3.76%
Embraer-Empresa Br… CAPS Rating: *****
BA $127.44 Down -3.24 -2.48%
The Boeing Company CAPS Rating: ****