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All new design likely to replace 737

“Our current bias ... is to move to a newer airplane, an all-new airplane,” Boeing CEO says.

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By Michelle Dunlop
Herald Writer
The Boeing Co. chief executive had the aviation world in a frenzy Thursday after strongly suggesting the company will come out with an all-new jet to replace its Renton-built 737.
“We’re going to do a new airplane,” said Jim McNerney, Boeing’s chief executive, at a Cowen and Co. conference that was webcast Thursday.
Boeing executives have previously hinted they’re leaning toward replacing the 737 rather than putting new engines on it, as competitor Airbus has said it will do with the A320. But McNerney quickly sought to add uncertainty to his initial comment.
“We’re not done evaluating this whole situation yet, but our current bias ... is to move to a newer airplane, an all-new airplane, at the end of the decade, beginning of the next decade,” he said.
McNerney said he believes Airbus’ A320 New Engine Option is aimed more at satisfying Airbus’ existing customers. The re-engined Airbus single-aisle airplane will be available to customers by 2016. Airbus’ A320 NEO is expected to save 15 percent on fuel costs over the existing version.
“I feel pretty comfortable that we can defend our customer base,” McNerney said.
That customer base includes Southwest Airlines, which flies only the 737, and has bought more of them than any other airline. On Jan. 20, its chief executive, Gary Kelly, was asked whether Boeing’s plans for the 737 will cause Southwest to look at other new planes.
“If they told us that we’re not going to see a more fuel-efficient 737 for another 20 years, that probably would cause us to do something,” he said.
Earlier this week, Teal Group analyst Richard Aboulafia predicted that Boeing’s tardiness in making a decision on the 737 could cost the company a major order.
“I think there will be a defection from the 737 to the A320 NEO or (Bombardier’s) C-Series by the end of the year,” Aboulafia said.
When Boeing eventually does announce its replacement for the 737, “we’ll do a new airplane that will go beyond the capability of the (A320) NEO,” McNerney said.
Boeing’s CEO also had good things to say about the future of the company’s Everett-built 777. Boeing has announced production rate increases for the 777, going up to 8.3 aircraft per month by 2013. But McNerney indicated it’s likely the company will raise rates on the 777 again.
“I think we’re going to sell one heck of a lot of 777-300ERs,” McNerney said.
McNerney also talked about another yet-to-be launched plane, the 787-10. Boeing previously had talked about a larger version of its popular Dreamliner jet but put plans on hold because of three-years worth of delays on the 787-8. The company is slated to deliver the first 787-8 in the third quarter.
On Thursday, however, McNerney described the 787-10 as “a very nice (Airbus) A330 replacement.”
McNerney’s comment came the same day that Boeing and EADS submitted their final bids to the Air Force for a $35 billion tanker contest. EADS, the parent company of Airbus, is offering the Air Force a tanker based on the A330.
The Associated Press contributed to this report.



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