* Boeing grappling with future of 737
* Company debates re-engining and size
CHICAGO, April 12 Boeing Co (BA.N) may be
leaning toward building a new version of its best-selling 737
narrowbody jet, but industry experts said on Tuesday the company
seems to be conflicted on the matter and appears increasingly less
likely to make a decision in the next few months.
Boeing is deciding whether to redesign the 737 or simply
put a more fuel-efficient engine in the existing design as its
top rival Airbus EAD.PA intends to do with its competing
A re-engined plane would offer fuel savings of about 10
percent and could be brought to market around 2016. An all-new
version could offer double the fuel savings and be brought to
market around 2019.
The world's second-largest commercial plane-maker appears
to be "split internally" about the direction of the 737
program, said aerospace analyst Scott Hamilton from Leeham Co LLC
in a blog posting.
Hamilton said the split appears to be over the potential
size of the new aircraft and whether it should feature two
aisles instead of just one.
Boeing has said repeatedly it is leaning toward making an
all-new 737. Mike Bair, Boeing's head of single-aisle
development programs, told Reuters in March that Boeing hopes to
share its direction by midyear, but he stopped short of promising
a firm decision.
Boeing had previously said it would offer clarity on the
737 by the end of 2010, but delayed that decision.
"We are actively working with our customers and industry
partners to identify the best solution for the small airplane
market," said Boeing spokeswoman Lauren Penning.
"Boeing has been clear that we expect to provide more clarity
about our product strategy direction by midyear," she said.
Airbus rolled the dice last year on a re-engined version
of its competing A320. The company has pulled in impressive
orders for the revamped model known as the A320neo.
Boeing and Airbus are racing for control of a single-aisle
market worth an estimated $1.7 trillion over the next 20
Alex Hamilton, managing director of EarlyBirdCapital, said he
does not expect Boeing to announce plans for a new plane this
"I believe they have several other issues on their plate
and are very hesitant, I would assume, to mess with their bread
and butter," said Alex Hamilton, managing director of
EarlyBirdCapital. "In addition, I think the recent Southwest
incident points to the wear and tear the 737 takes and how
difficult a re-engine would be."
The 737 made headlines earlier this month after a Southwest
Airlines 737 made an emergency landing with a gaping hole in the
fuselage. U.S. regulators last week ordered airlines to inspect
older model 737s for cracks.
(Reporting by Kyle Peterson; Editing by Phil Berlowitz)