RIO DE JANEIRO — As part of the 82nd Annual General Meeting (AGM) of IATA held in Rio de Janeiro, Aviacionline spoke in an exclusive interview with José Sicilia, Boeing’s Vice President of Commercial Sales & Marketing for Latin America and the Caribbean.

During the conversation, we discussed key issues for the sector such as the stabilization of supply chains, production rates for the 737 MAX, 787, and 777X programs, the versatility of configurations required by operators in the region, and the resilience of the Latin American aviation market in the face of global challenges.

Aviacionline: This is the first AGM this century in South America, as the last one was held in 1999. Is that a sign that South America is growing and deserves attention and importance?

What 737 MAX production rates is Boeing targeting?

Boeing is at 42 single-aisle aircraft per month and targets 47 in the near term (hoping to reach it within the year), with a possible later increase to 52 if the supply chain allows and the FAA approves.

What are Boeing’s plans for the 787 and 777X programs?

The 787 is at rate 8 and Boeing seeks stability at that rate before transitioning to 10 per month; the 777X remains in certification as Boeing provides data to the FAA and timing will follow the certification process.

Why is fleet commonality important for airlines in Latin America?

Commonality across aircraft families reduces operational complexity while offering configuration flexibility to adapt to changing demand, geography, and different market models (low-cost, hybrid, legacy).

How did Latin American airlines perform after the pandemic?

The region’s traffic recovered strongly (+42%) while fleet grew less than 20%, indicating high productivity and utilization and a recovery that largely occurred without significant government support.

What is the role of cargo in widebody aircraft decisions?

Belly cargo capacity can justify choosing larger passenger widebodies for combined passenger and cargo revenue, potentially reducing immediate need for dedicated freighters depending on cargo strategy.

José Sicilia: We have to thank the airlines of South America, and especially LATAM, for proposing to highlight this region, which, as we were discussing recently, is one of the fast-growing in the world. When you look at what aviation is and what it contributes to socioeconomic development, you realize it is a very integral part. We see this very positively.

We would have liked this to have happened much sooner because, if you look at the trend over the last 25 years, you see everything that has grown. In this region, traffic has grown threefold and the fleet almost twofold. It is a significant region where aviation is extremely important because of the topography, the different geographies, and the dispersion of the population; aviation is “the human internet”. Therefore, we see this very positively, and we are supporting LATAM to show the world and provide a window into what our region is.

Market recovery and Boeing production rates

Aviacionline: Thinking precisely about the region and these years of evolution and recovery, it was one of the regions that recovered from the pandemic practically without government assistance; it did so on its own. And speaking of recovery, Boeing is finally in a stage of recovery, moving toward a normality it hasn’t had for quite some time. How do you see the possibility of a projected increase to 70 aircraft, and how is the company evolving toward that necessary normality?

José Sicilia: Well, when you talk about 70 aircraft, we are still at 42 in the single-aisle segment, and what we want is to reach 47, a production rate for which we already got the green light from the FAA. We want to be stable, and for the moment we are meeting the deadlines. Obviously, everything is done under safety and quality parameters; then we have to show the metrics, present the data, and reach a mutual agreement with the FAA to get approval and move forward. We hope to be at 47 sometime this year, and later on, if possible and the production chain allows it — which is very important for the health of our suppliers — we will get to 52; for now, that is the plan in the short term.

On the 787 side, we are currently at a rate of 8 and, similarly to the 737, we need to be stable at 8 before we can begin transitioning to 10 per month. The 777X continues its certification; we are trying to provide the FAA with all the material, analysis, and data, and they will guide the timing. 

Once that aircraft is certified and starts flying, we will see, but it is one of the most successful products in Boeing’s history. Looking at it from that perspective, between the MAX 7, the MAX 10, and the 777, the pace of innovation we are bringing to the market gives airlines great competitiveness; that is the short- and medium-term outlook.

Going back to the growth topic, indeed, after COVID this region’s traffic took off by 42 percent. Meanwhile, the fleet grew by less than 20 percent, which shows the high productivity of the region’s airlines. It is very important to highlight that they grew not only in units, but also in productivity and utilization; all of that led Latin America to stand out in the recovery, something nobody expected.

Manufacturing process efficiency and supply chain challenges

Aviacionline: Three questions come to mind. The first is whether the MAX production crisis helped you set limits across the whole production circuit, helping today to mitigate supply chain problems from your suppliers. In other words, do you now have stages in which, for example, you no longer have traveled work, which gives you greater control over the entire circuit?

José Sicilia: Ah, for example, the traveled work or the move-ready criteria we talked about. Yes, well, you know, it’s interesting. It all comes from Lean Manufacturing methodology, of which Boeing was a pioneer in the aviation industry; we implemented it, we knew how to do it in-house, and we had internalized it.

Now we have been reborn, in the sense of reminding ourselves that efficiency means moving flow outward to be more efficient, but always under the quality and safety parameters. What has helped us a lot is the Safety Management System, which allows us to determine whether the airplane is ready or not to move from one position to another; for that, there is a checklist. We have had to train new personnel because some experienced people retired during and after the pandemic.

Right now, everything is coming together in a very positive way to ensure that every movement of the aircraft is done safely, knowing precisely what is happening to the aircraft at each station of production. As you said, we’ve squeezed the stone dry, because if the system was already efficient, now we’ve reached another level of efficiency.

Family versatility and segmentation

Aviacionline: A little while ago I was speaking with people from Aerolíneas Argentinas and they told me they are about to start receiving the 737-10s. It seems to me there are two trends at the global and regional level: at one point we moved from pure legacy to pure low-cost (from three classes to single class), and today the truth seems to lie somewhere in the middle. Even the most low-cost operator knows it loses the ability to capture a passenger who can pay more if it doesn’t offer an additional class, and vice versa. In terms of capacity and class expansion, is the 737-10 the right single-aisle aircraft for the region today?

José Sicilia: Look, I worked for an airline (Ed. Note: TACA). At the end of the day, the flexibility of a family is unbeatable because consumer habits keep changing and networks evolve. The advantage, in my view, is that when comparing the 7, 8, 9, and 10, you can densify or add premium classes as you wish.

Given the volatility we sometimes experience in our region, the family as a whole is much better positioned because it gives you that flexibility. It allows you to mix the fleet while preserving commonality to avoid operational complexity. For example, you can deploy a MAX 9, as Copa does, with a premium section, premium economy, and economy, while basically maintaining the same range as a MAX 8, but with a revenue mix that can outperform the 8.

Aviacionline: At the same CASK, better RASK.

José Sicilia: Exactly, or even lower CASK, because with the -8, if you don’t have the demand, you can manage it at that level as well. Or if you are in a market like GOL’s, you can choose to configure everything in economy but reserve a more premium section to provide differentiation, which is the idiosyncrasy of the Brazilian market.

That versatility is precisely what Aerolíneas Argentinas is doing. They say: “I’ve operated the 8, I see room in the 9, and I see room in the 10; which one do I go for?” They have opted for the 10 because of the market, but that doesn’t mean that if the Argentine market evolves, they can’t densify the 10 or add more premium seats. The advantage of the 10 is that it has 17% more range than the 737-800; it basically flies all over South America, so it is not a limited aircraft.

Aviacionline: And even though there are some limitations, it also allows you to operate in terrain that is not very forgiving, like what we have in the region.

José Sicilia: Of course. This region challenges you in many ways, and that’s why I come back to the concept of the family. Its versatility adapts very well to the challenges of our region, which is unique. In other regions you have extreme heat and sand, which greatly affects maintenance. Others are more benign but involve longer stages, or a lot of cycles; here in Latin America we have it all: a blessing and a curse at the same time. I am very proud to represent Boeing because we have achieved a family that covers all the market’s needs with the same aircraft concept, not an isolated design point.

Aviacionline: In that range there are two more variants: the -7, which still needs to complete certification and comes next, and the -8200. I was wondering… for a regional operator planning to offer a single class, doesn’t the -8200 make more sense than the 737-10?

José Sicilia: Look, we come back to adaptability and consumer habits. In the case of Ryanair, they operate the MAX -8200, which I call the High Capacity 8 because it comes with an additional door that allows you to carry up to 200 passengers; and they will also operate the MAX 10, which will take them to up to 230 passengers.

That is the ultra-low-cost model. The flexibility of the family from a yield management perspective makes those 20- or 30-seat steps fundamental to maximizing revenue. From that point of view, the -8200 and the 10 work very well because the gap is not very large; when the difference is 40 seats, it is very difficult to manage revenue. It allows you to improve your offering relative to the demand you are experiencing, so the -8200 is a perfect fit for that business model. There is a little something for everyone, and that is the advantage of having the family.

Wide-body aircraft and the cargo market

Aviacionline: The region has 777 customers who should migrate to the 777X, and also 787 customers. Beyond densities, capacities, and routes, is this region more suited to the 787-10 or the 777X?

José Sicilia: We return to the geographical challenges: you have the North-South corridor, the corridor toward Europe, and the corridor toward Asia; it is a combination of markets. We have sought to provide a lot of cockpit commonality for pilots, and although they are two different families, we believe that for a large operator like LATAM the combination of both is the ideal path, as demonstrated today by their operation of the 787 and the 777. The current trend shows fragmentation: people want to fly point to point without necessarily relying on mega connecting hubs. In my opinion, there is room for both families.

And the cargo side is also extremely important, as are the F variants. Belly cargo capacity can justify choosing a larger aircraft based on both passenger and cargo demand. A 777-300ER, for example, can carry between 20 and 30 tons of cargo while transporting passengers.

Aviacionline: Which saves you from having to go for a dedicated 777-8F, for example.

José Sicilia: Of course, although that depends on the cargo business strategy, since certain goods can only be transported on a dedicated freighter. But versatility remains the central axis. Our philosophy seeks for all products to be versatile and flexible in planning through their respective families: you have the 777-8, the 777-9, and the 777-8F in one segment, and likewise the 787-8, -9, and -10 in the other.

Movies, music, and books

Aviacionline: Three final questions, very short: a book, a movie, and a song.

José Sicilia: As a movie, Top Gun: Maverick comes to mind. I’m passionate about aviation, and the F-18 was always my favorite aircraft since I was a kid, I can’t lie to you. Another very close one is The Martian, because it helps inspire us at this time when we are trying to return to the Moon with the real goal of going to Mars. Choosing between them is difficult; I’d take it to penalties, now that we’re in football cup season.

As for a song, I choose the Isa Canaria; I’m from the Canary Islands, so that one goes straight to my heart.

And as for a book, one with a football theme that I’m reading and enjoying a lot is The Real Madrid Way, which tells the history of Real Madrid while focusing on its culture and management philosophy, which made it the greatest club in the history of world sport. Everything is based on values and corporate culture, something that resonates deeply at Boeing. In the end, what truly sets you apart is your culture and your team; people are what make the absolute difference.