Boeing Abandons New Aircraft Design, Chooses to Re-Engine 737 to Compete with Airbus

Boeing’s Board of Directors approved the launch of the re-engined 737 MAX on August 30, 2011, abandoning plans to develop an entirely new aircraft design. The decision came after Airbus launched the A320neo in December 2010 and captured 1,029 orders by June 2011, including a historic defection by Boeing’s longtime exclusive customer American Airlines. Faced with losing market share, Boeing chose the faster, cheaper option of re-engineering the 50-year-old 737 design rather than developing a clean-sheet aircraft that would take a decade to bring to market.

Boeing had been developing the Yellowstone Project, a new aircraft family intended to replace the 737 with 30% fuel savings using advanced materials and design. However, the Airbus A320neo offered airlines 15-20% better fuel economy immediately, threatening Boeing’s market dominance. When American Airlines announced in July 2011 it would order 460 narrowbody jets including 260 Airbus aircraft, Boeing faced an existential crisis. American demanded Boeing commit to a re-engined 737 or lose the entire order.

The re-engine decision prioritized time-to-market and development costs over engineering soundness and safety. Boeing estimated the development cost for the 737 MAX at $2-3 billion compared to $10-12 billion for a new aircraft. By promising delivery in six years instead of ten, Boeing could maintain its narrowbody market share and avoid ceding the field to Airbus. The decision meant adapting much larger, more fuel-efficient CFM LEAP engines to an airframe designed in the 1960s.

The engineering compromises required to fit the oversized engines on the 737’s low-slung fuselage would lead directly to the MCAS system that killed 346 people. The larger engines had to be mounted higher and farther forward on the wing than the original 737 design, which changed the aircraft’s aerodynamic characteristics and created a tendency for the nose to pitch up during certain flight conditions. Rather than redesigning the aircraft or requiring extensive pilot retraining, Boeing chose to install an automated system to counteract the pitch-up tendency and hide the flight characteristic changes from pilots.

The MAX launch decision exemplified how market competition and shareholder pressure override safety engineering in modern corporate capitalism. Boeing executives chose short-term competitive positioning over the long-term investment in a properly designed aircraft. The company knew the re-engine approach created fundamental design challenges, but the alternative—allowing Airbus to dominate narrowbody sales for a decade—was commercially unacceptable. The 346 deaths that followed flowed directly from this corporate calculation that market share mattered more than human life.