Boeing still undecided on replacing 737

Rain didn’t stop thousands from attending the first morning of the Paris Air Show, which opened at Le Bourget Airport north of Paris.

Inside the dry conference center this morning, Boeing’s head of commercial aircraft, Jim Albaugh, said separate teams at Boeing are focusing on putting new engines on its popular 737 airliner or developing a new plane to replace it. Each has advantages.

A redesign is technically viable and and could present an 8 percent operating cost advantage to operators and a lower risk to the company, Albaugh said.

A new airplane would be more costly and risky for Boeing, but it would give operators double-digit operating cost improvements and a plane poised for generations to come.

“I think going with a new airplane certainly is a strategic one, and one that would take care of our customer even better,” Albaugh said.

This time when it designs the plane, it would design the production system together. Whether it would be built at a new facility or require the expansion of a current facility hasn’t been decided.

In addition, Air Lease Corp., a Los Angeles–based leasing company, ordered 50 of Neo planes, including 14 options.

“The A320 Neo family represents the industry’s new single-aisle benchmark, and we look forward to seeing our customers benefitting from the cost savings it promises to deliver,” said Steven Udvar-Hazy, ALC’s CEO, in a statement.

The rest of the competition

At its briefing Monday, Boeing acknowledged that some capable manufacturers are entering the marketplace, including Brazil’s Embraer, China’s COMAC and Canada’s Bombardier.

“We’re taking them all very seriously. I’m not sure all of them will be successful,” he said, adding that the Chinese will “eventually build a very good airplane.”

Bombardier has been developing the C-series program, which will put the Canadian firm in more direct competition with the A320 and the 737.

“It appears as though the C-series is competing at 130 seats. We intend on competing at 125 seats upwards, and we’ll defend that space vigorously,” said Nicole Piasecki, vice president of business development and strategic integration for the Boeing commercial-airplanes unit.