How to Research and Invest in the Aviation Industry Today

TL;DR

Boeing's 737 Max crashes have raised concerns about the lack of transparency in explaining the complex system and compromises made in the design of the aircraft, while the aviation industry struggles to introduce new planes for today's market.

Transcript

hi I'm Bill Blaine chief strategist at shard capital here in London one of the asset classes we watch very carefully is aviation it's an absolutely fascinating market and it's not just about aviation manufacturers like Boeing and Airbus but there's a lot changing in aviation at the moment and one of the major things we've noticed is what's going on... Read More

Key Insights

• 🤨 Boeing's 737 Max crashes have raised concerns about the transparency and explanation of complex systems in aircraft.
• 🥺 The compromises made in the design of the 737 Max, such as fitting larger engines and lengthening the undercarriage, have led to inefficiencies and potential risks.
• 🖤 The popularity of the 737 Max indicates the lack of viable alternatives in the aviation market for airlines.
• 👶 Boeing's decision to innovate the old plane instead of introducing a new design highlights the challenges and costs associated with developing a completely new aircraft.

Questions & Answers

Q: What caused the crashes of the Boeing 737 Max?

The crashes were caused by a system failure that led to an uncontrollable dive. It was later revealed that a sensor failure was responsible for the initial crash.

Q: How is Boeing addressing the safety concerns of the 737 Max?

Boeing plans to release a software fix that will enable all pilots to avoid the system failure issue and ensure the safe flying of the aircraft.

Q: Why did Boeing choose to extend and innovate the old plane instead of introducing a completely new aircraft?

Developing a new aircraft, like the Boeing 787 Dreamliner, requires significant investment and resources. It was more cost-effective for Boeing to make modifications to the existing design.

Q: Are there any viable alternatives to the Boeing 737 Max in the aviation market?

Currently, there is no viable alternative to the 737 Max in terms of capacity and efficiency. Airbus' A320, which is 30 years old, also does not provide a replacement option.

Summary & Key Takeaways

• Boeing's 737 Max has experienced two disastrous crashes, resulting in over 340 fatalities, leading to concerns about the safety features and lack of information provided to pilots.

• The design of the Boeing 737 Max is based on a 50-year-old aircraft model, with compromises made to accommodate new fuel-efficient engines, leading to inefficiencies and potential risks.

• Despite the shortcomings, the Boeing 737 Max remains the most popular plane in the world, with over 5,000 orders by global airlines.