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It's been three months since the Boeing (NYSE: BA) 737 MAX was grounded. During that time, Boeing has made progress in developing a fix for its most important model, but there's still no clear timetable for when the aerospace giant will get the 737 MAX back in the air. Even when it does, it could take months or years to convince air travelers that the plane is safe, posing risks for airlines that operate the troubled jet.
That will give Airbus (NASDAQOTH: EADSY) a huge advantage at next week's Paris Air Show, the most important sales event of the year for aircraft manufacturers. That said, there's no guarantee that Airbus will be able to cash in on its rival's current woes.
Boeing faces two big headwinds
The 737 MAX grounding represents the biggest obstacle to Boeing having a big Paris Air Show order haul. While most industry insiders believe the Boeing 737 MAX will be perfectly safe following the pending software, cockpit, and pilot-training changes, it will take a while to convince everyday travelers. Thus, even if airline executives aren't worried about the 737 MAX's safety, they may hesitate to place new orders right now for fear of a customer backlash.
Airlines likely do not want to be linked publicly to Boeing 737 MAX orders right now. Image source: Boeing.
One way around this conundrum would be for airlines to sign letters of intent for the Boeing 737 MAX as unidentified customers. This would give Boeing a modest PR win, while the airlines could wait a year or even longer to finalize and officially announce their 737 MAX orders.
The 737 MAX saga isn't the only thing standing in the way of a big order haul for Boeing next week. The growing trade tensions between the U.S. and China represent yet another hurdle.
Boeing has reportedly been negotiating the sale of 100 widebody jets to Chinese airlines. However, any deal would require the blessing of China's government, and aircraft orders are a key bargaining chip for China in trade negotiations with the U.S. As a result, the Chinese government is unlikely to approve any orders except in the context of a final trade deal.
Airbus may launch a longer-range A321neo
With Boeing still swimming against the tide, Airbus has a chance to make a splash at the Paris Air Show by launching the A321XLR: an ultra-long-range version of its A321neo jet. Airbus has already begun delivering a modified version of the A321neo with extra range, called the A321LR. But while the A321LR has enough range to fly between the Northeast U.S. and parts of Western Europe, an extra 500 to 1,000 miles of range would dramatically increase the number of feasible routes. The A321XLR would provide this additional range.