United Airlines has taken a close look at an all-new jetliner that Boeing engineers are developing for trans-Atlantic flying, and likes what it sees.
“What we’ve seen so far is very, very interesting to us,” said Andrew Levy, United’s chief financial officer. “We certainly hope Boeing launches the airplane. We think there is a need for it.”
Boeing envisions two models to fill the overlapping market segments served by its out-of-production 757 narrow-body and 767 wide-body jets, which were developed jointly in the late 1970s and early 1980s and share the same cockpit design.
“One will be bigger and fly not quite as far, one will be smaller and fly farther,” said Randy Tinseth, a Boeing marketing vice president. “To some extent you address the single-aisle market, to some extent you address the wide-body market and to some extent you are stimulating growth where no one has been before. And that has been a fascinating part of the whole project.”
An endorsement from United, a large Boeing customer, would go a long way toward making the business case for so-called middle-of-market jetliners. Boeing has honed its design to seat between 225 and 260 passengers, while working to bring production costs in line with prices that airlines are willing to pay.
“I wouldn’t be surprised if there is a decision to offer by this year,” said John Plueger, the chief executive and co-founder of Air Lease, said of the first step in Boeing’s process to formally introduce a new jetliner. “That might be a bit early, a bit aggressive. But that would not surprise me.”
United had been among the skeptics of the jets that Boeing has spent years developing to fill the gap in its product line-up between the largest of the narrow-body 737 models and the smallest 787 Dreamliners. While Boeing is designing a twin-aisle aircraft with the range to fly from London to New York, budget carriers are shifting more mid-range flying to relatively inexpensive narrow-body jets such as Airbus Group SE’s A321neo.
After delving deeper into the Boeing design, “we’re convinced, we get it. We understand the economics,” Mr Levy said at the Istat annual conference in San Diego. “We thought a twin made no sense, but we walked through it and had our questions answered. From what we’ve seen, we like it. But it’s a paper airplane. Hopefully they’ll launch it.”
Timing and price are two of the critical elements that Boeing must consider in its high-stakes chess match with Airbus for market dominance. Billions of dollars of investment are at stake, and the pay-off can be thwarted by factors ranging from cheap oil to supplier stumbles. Boeing has been planning its new family of mid-range aircraft, while Airbus has been marketing upgrades of existing jetliners: the A321, its largest narrow-body; and A330 wide-body jets.
Boeing’s jet, which would probably be known as the 797, may begin flying in 2025, said Steven Udvar-Hazy, who co-founded Air Lease and is influential in shaping product strategy for Boeing and Airbus. The engine technology and break-through design of the new aircraft will be critical since it may fly through 2060, he said.
Mr Udvar-Hazy is not convinced that Boeing has figured out the magic blend of price, performance and production costs that will make the 797 a best-seller.
“Boeing has to really wrestle with that issue,” he said. “As we sit here today, the cost of developing and manufacturing the airplane at a price that gives the airlines value – I don’t think that equation has been solved.”
* Reuters
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