Boeing considers its 737 options

Published 6:49 pm Thursday, June 3, 2010

The Boeing Co. will go ahead with an all-new single-aisle jet, to replace its popular 737, if the company decides it can do so effectively by the year 2020, the company’s chief executive said Thursday.

But if Boeing determines that an efficient replacement for the 737 can’t be produced until 2025, the company will look to put new engines on the 737, Jim McNerney, Boeing’s chief executive, said during an investors conference.

In the short term, Boeing aims to take back the aircraft deliveries title from rival Airbus once Boeing begins deliveries and ramps up production on its 787 Dreamliner. In the meantime, Boeing trails Airbus in jet deliveries so far this year with 179 compared to Airbus’ 206.

However, Boeing leads its European competitor in net orders through the first five months of the year. Through the end of May, Airbus has logged in 73 net orders, the company reported today. Altogether Airbus has won 81 orders but received eight cancellations as well.

Boeing, which updates its orders Web page weekly, has won 111 net orders through June 1. The company has received a total of 139 total orders but logged 28 cancellations this year.

Boeing delivered 33 aircraft in May, down from 38 in April. The company plans to slow production of its 777 jet beginning this month. Airbus delivered 47 aircraft in May, including 37 single-aisle aircraft and 10 widebody jets.

For Boeing’s McNerney, delivering the first 787 Dreamliner later this year, nearly two years late, is a top priority for the Chicago-based aerospace company. But Boeing’s CEO also is keeping his eye on the U.S. Air Force tanker contest. Boeing plans to offer the Air Force a tanker based on its Everett-built 767 jet.

But Boeing faces competition from EADS, the parent company of Airbus, for the $35 billion aerial refueling tanker award.

“Airbus could win this thing on price,” McNerney said.

Despite recent rumors that Boeing may not bid for the $35 billion deal supplying the Air Force with aerial refueling tankers, McNerney said it is likely Boeing will submit a bid in July. However, the Air Force’s fixed price contract poses “significant risk.” McNerney said he isn’t interested in trying to low bid EADS or offer a price that would cause Boeing not to make a profit.

“This could be a dangerous situation for Boeing,” he said.

Boeing’s rival EADS, parent company of Airbus, announced earlier this year that it will bid for the U.S. Air Force tanker contract even after its partner, Northrop Grumman, dropped out.

Boeing backers in Congress have been working to get the Air Force to consider illegal subsidies that Airbus received, according to a World Trade Organization ruling. Airbus has a counter complaint against Boeing pending with the WTO. The Air Force has said it won’t take the WTO ruling into consideration.

The Air Force plans to award its tanker contract later this year.