August 16, 2022

Boeing to Decide This Year Whether to Revamp or Replace 737 Jet

Pressure on Boeing to define its future strategy for the fast-selling 737 has been building since late last year, when its European rival, Airbus, announced that it would bring to market by mid-2016 an updated version of its A320 single-aisle jet, with new engines and a more aerodynamic wing. Boeing plans delivery of its new engine design or new jet around 2020.

Airbus has since lined up more than 200 firm orders for the A320neo — the letters stand for new engine option — with potential orders from customers to buy as many as 200 more.

Industry executives expect Airbus will have orders for well over 500 of the planes by the end of the Paris Air Show, which begins Monday.

“That’s going to be no surprise to us,” James F. Albaugh, the chief executive of Boeing Commercial Airplanes, said at a briefing with reporters on the eve of the show.

He defended Boeing’s caution, saying that the company preferred to be guided by airline customers rather than by competitors.

“What we have to make a judgment on is what is the best thing for us to do to support our customers,” Mr. Albaugh said.

“Is it to improve an already good airplane — which is lower risk — or to do a higher risk, new airplane, which will provide a new airplane not just for this decade but an airplane for the next 50 years?” he asked. “That’s what we’re trying to balance.”

Airbus has been promising fuel savings with the A320neo of as much as 15 percent over current engines. The new plane also is expected to run more quietly, with lower operating costs, and to be able to fly farther or carry heavier payloads while emitting less greenhouse gas.

Airbus says it expects to spend around $1.5 billion on the enhancements, and Boeing has placed the cost of redesigning the engine of the 737 in that range. Developing an all-new replacement for the 737 most likely would cost Boeing as much as $12 billion, analysts estimate.

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