MIAMI — Last week, Qatar Airways placed a massive order for up to 100 Boeing airplanes, buying 30 787-9 Dreamliners, 10 777-300ERs, and signing a letter of intent for 60 737 MAX airplanes. While this is undoubtedly a huge win for Boeing, some of the bolder proclamations seen over the weekend about this being a blow for the 737 MAX, or about Boeing’s superiority (from the mouth of Qatar Airways GCEO Mr. Akbar Al Baker himself) are assuredly overblown.

Al Baker is as entertainingly bombastic as ever

The headline with any Qatar Airways order from either original equipment manufacturer (OEM) is always the commentary from Qatar Airways’ overwrought CEO, and this order was no different. As always, Al Baker used the press as a bully pulpit to send a message, and this time his target was Airbus.
The backdrop here is definitely that Al Baker has a point about Airbus failing to deliver on promises for initial delivery. This has become an all-too common habit since the A380 was launched at the beginning, and there is something to be said for keeping those manufacturers on their toes, and holding them accountable for their promises.

But his comment that “Boeing makes the best airplanes,” is nothing but hot air. Both Airbus and Boeing make excellent products (though to hear Al Baker speak at times, both  OEMs consistently output junk), and depending on the market segment, different planes from either manufacturer have superiority in the context of real-world market need.

So fundamentally, this is another case of Al Baker trying to negotiate through the press. The problem is that at this point, almost everyone is on to his routine. If Boeing is late with the 777X delivery, Al Baker will suddenly discover that the A350-1000 is the greatest thing since sliced bread. His commentary surrounding this order is more of the same — bark over bite.

On an unrelated note, the claim that Qatar Airways enjoyed a higher dispatch reliability with 787s and 777s than its A350s that has been making the rounds is also highly misleading. It might well be true that Qatar’s A350’s have lower dispatch reliability than its 787s and 777s at this moment of time. But anyone without Boeing-tinted goggles on would recognize that this is an entirely normal position for a new aircraft to be in.

By all accounts, the A350 is progressing very nicely in its expansion of service, and it is ahead of where the 787 was at the same point in its life cycle in terms of dispatch reliability.

The 787-9s are a nice get for Boeing, but it’s not a shock that Qatar Airways is buying more Dreamliners. The 787-8 has been a hit for Qatar Airways in opening long and thin routes, and as we have seen with airlines ranging from Air New Zealand to Air Canada, the 787-9 has many of the same capabilities in making new routes feasible.

737 MAX news is overblown

At first glance, the though of Qatar Airways flip-flopping from the A320neo to the 737 MAX would appear to be huge news. The 737 MAX is at this point losing both the real battle in terms of orders, and the perception battle because of the high profile airlines that have switched from the 737 NG to the A320neo.

In truth, that trend is overblown, and undoubtedly if Qatar Airways had placed a firm order for 60 737 MAX 8s to fly from its Doha hub, that would be massive news.

Unfortunately this isn’t quite a firm order, and as with any LOI there is a lot that could go wrong between now and when the order is completed. Even if Qatar Airways does take the planes, it could well park them with newly minted quasi-subsidiary Meridiana. The Italian carrier, of which Qatar Airways owns 49%, is a struggling leisure airline based in Italy and Qatar’s move would be rather unprecedented given that rival Etihad has eschewed direct orders for subsidiaries despite making several equity investments of its own.

30 firm MAX orders plus 30 options might make a degree of sense for Meridiana’s future fleet needs, as centralizing on a two-type fleet (737 MAX and 767) would simplify the carrier’s operating structure.

There were some renderings made of the 737 MAX in Qatar Airways colors, but that once again falls in the category of Al Baker sticking it to Airbus through the press. Functionally, despite the cancellation of four A320neo orders, Qatar Airways appears to be sticking with the A320neo as planned. Our view is that it is very likely (85%) that you will see the A320neo in substantial numbers in Qatar’s fleet and reasonably unlikely (35%) that you will see the 737 MAX in any numbers in Qatar’s fleet.

The Boeing 777-300ER order is a win for Boeing but doesn’t come close to closing production gap

Ten 777-300ERs is a non-trivial figure by almost every metric. At list prices that is worth more than $3.2 billion (more than $1.5 billion applying standard discounts inflated a bit by Boeing’s current situations), and it is bigger than the entire 777-300ER fleet of 16 different airlines.

The one thing it isn’t big enough to do is change the trajectory of Boeing’s production gap in any meaningful way, as the airframer still needs to sell more than 100 airplanes to bridge production to the December 2019 entry into service (EIS) of the re-engined 777X.

With that as the backdrop, this is a nice order for Boeing, but in closing less than 10% of the overall production gap, it isn’t a home run.