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Boeing May Be Quietly Rebranding the 737 MAX

By Adam Levine-Weinberg – Aug 24, 2020 at 8:50AM

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The aircraft manufacturing giant is deemphasizing the "MAX" part of the 737 MAX.

Aircraft orders have been few and far between for Boeing (BA -5.37%) this year. And as of the end of July, the 737 MAX family -- which accounts for the vast majority of Boeing's backlog but has been grounded for 17 months following two fatal crashes -- had not rung up a single order in 2020.

That finally changed last week, as the aerospace giant announced a small 737 MAX order from Enter Air, a Polish charter airline. Notably, the wording of the press release suggests that Boeing may be trying to gradually rebrand the 737 MAX family to address its poor reputation.

Finally, a sale

Under the deal announced last Wednesday, Enter Air placed a firm order for two 737 MAX 8 jets, with options for two more. In conjunction with the purchase, Boeing agreed to revise the delivery schedule for jets Enter Air already had on order. The agreement also specified the compensation that Enter Air will receive to cover costs and lost earnings related to the long-running 737 MAX grounding.

This deal marked the first 737 MAX sale of 2020. That is a remarkable commentary on the combined impact of the type's grounding and the COVID-19 pandemic on 737 MAX demand. Boeing had booked hundreds of firm orders for the 737 MAX year after year for most of the past decade.

The sale itself isn't very significant for Boeing. During the first seven months of 2020, the company's commercial jet division booked just 59 new orders, offset by nearly 900 aircraft that were removed from the backlog either due to order cancellations or financial distress of the would-be purchasers. Two firm orders and two options won't make a dent in the backlog erosion Boeing has experienced this year.

A Boeing 737 MAX 9 jet flying over clouds

Image source: Boeing.

What was more notable about the press release announcing the deal was that it seemed to herald a subtle rebranding of the 737 MAX family.

Taking the MAX out of the 737 MAX

While Boeing's order announcement used the term "737 MAX" several times, it was titled "Enter Air to Purchase up to Four Boeing 737-8 Jets." The aircraft model being ordered was also described as the 737-8 in three different places within the press release.

The 737-8 designation isn't new. Internally, Boeing has referred to the variants of the 737 MAX as the 737-7, 737-8, and 737-9 (and more recently, 737-10) for many years, predating the 737 MAX crashes. However, in previous order announcements and other news releases, Boeing had consistently referred to those models as the 737 MAX 7, 737 MAX 8, 737 MAX 9, and 737 MAX 10.

In short, it seems that Boeing is finally coming around to the idea of rebranding the 737 MAX, but in a very subtle way. For now, at least, it is still using the MAX designation to describe the aircraft family as a whole, while removing "MAX" from the names of each individual model.

The right way to (possibly) rebrand

The idea of rebranding the 737 MAX isn't new. Indeed, last April -- just a month after the second fatal 737 MAX crash -- President Donald Trump tweeted that Boeing should rebrand the 737 MAX "with a new name" once it had fixed the troubled jet family.

However, introducing a completely new name would have been dangerous. Dramatically changing the name to something like Boeing 838 could have made it seem like Boeing was trying to cover up what it was selling. Other companies have gotten away with this sometimes, but Boeing's position as one of the most prominent industrial companies in the U.S. and the widely reported problems with the 737 MAX would have made it difficult to slip this kind of bold rebranding past consumers.

By contrast, dropping "MAX" from the individual model names is more likely to succeed. It doesn't look like Boeing is trying to pull a trick on the flying public, but it deemphasizes the 737 MAX as an aircraft family distinct from the prior-generation 737-700, 737-800, and 737-900ER jets that have operated safely throughout the world for many years.

Back in January, Steven Udvar-Hazy -- widely considered the creator of the aircraft leasing industry -- urged Boeing to make exactly this change to its naming scheme. It looks like Boeing is taking his advice, renaming the 737 MAX in an effort to save it.

Adam Levine-Weinberg has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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