April 2019 | Dios Kurniawan
As the latest development of the continuing 737 MAX saga, Garuda Indonesia has officially requested Boeing to cancel its order of remaining 737 MAX planes. A brave (or perhaps rather emotional) move, but 737 is the workhorse of the airline, thus cancelling 737 MAX order would leave Garuda’s fleet with a huge capacity gap.
What will be the alternative to 737 MAX? Without doubt, the closest competitor is Airbus A320neo. However, Airbus is already very busy fulfilling orders from airlines all around the world. There are 4,000+ A320s on order while the production capacity is less than 700 aircrafts per year. At this pace, if Garuda is to place order for A320neo today, the first delivery will happen by 2024-2025. By that time, Garuda’s existing Boeing 737 NGs will be in service for twenty years. They will be in a dire need for replacement.
With Airbus unable to meet the demand, practically there are only very few options left to go for acquiring new narrow body planes. Let’s see what the alternatives in the market are:
The Russian 160-200 seater jetliner is aimed to be a direct competitor to Airbus A320neo and Boeing 737 MAX. Equipped with American engines and state-of-the-art technology, it promises lower ownership and operating costs than the competition. MC-21 made its maiden flight in 2017, and is now in testing and certification process. Delivery to airlines is scheduled to happen in 2020. While MC-21 might be an interesting option, Russian products are generally hampered by poor reputation on support services.
The government of China has a bold ambition to propel its aviation industry to the global market, and Comac (a state-owned company) is tasked with a gargantuan responsibility to deliver the first large commercial twin jet. The company has been working on a 150-160 seater plane called the C919 since many years, and it will be the answer to American Boeing 737 and European Airbus A320. Similar to its Russian counterpart, it will be sold with Western engines but at the same time China is developing its own engine as well. First delivery to China Eastern Airlines is scheduled in 2021-2022 time frame. C919 is an untested airframe, and how reliable this aircraft performs compared to the Western competitors remains to be seen.
Without a clear substitute to Boeing 737 MAX in place, Garuda’s decision to cancel 737 MAX order would be devastating to its business if not carefully remediated. Would Garuda be so courageous to go for the Chinese or Russian alternatives?