March 5, 2018 / 8:27 PM / in 3 months

Boeing executive rules out reviving 767 passenger jet

PARIS (Reuters) - Boeing Co (BA.N) on Monday ruled out reviving its dormant 767 passenger plane as it continues to ponder options for a potential new niche in the middle of the aircraft market.

FILE PHOTO: Boeing's logo is seen during the Japan Aerospace 2016 air show in Tokyo, Japan, October 12, 2016. REUTERS/Kim Kyung-Hoon/File Photo

“Bringing back the 767 (passenger version) - I just don’t see it,” Randy Tinseth, vice-president of commercial marketing, told reporters on a conference call.

There has been some speculation Boeing would revive the 767 wide-body passenger line to offer airlines a low-price backstop in case a proposed brand-new mid-market plane suffered delays, or in case Boeing decided not to go ahead with that project.

Boeing continues to target 2024-25 for entry into service of a possible family of jets with 220-270 seats, designed partly to replace single-aisle 757 and some wide-body 767 models.

“If it goes beyond that (date), that would be a challenge as (airlines) do have to replace those ‘57s and ‘67s,” Tinseth said.

Boeing says it is examining the business case for such a jet. Tinseth declined to say when it might make a decision, but industry sources say it could start offering the jet this year.

“We continue to make progress on the program. Things around configuration are coming together,” Tinseth said, adding Boeing had not decided whether to offer two engine choices or stick with a single engine maker, as on its 737 and 777.

The mid-market plane would offer 40 percent lower costs per trip than some wide-bodies - although with shorter range - and it would offer airlines 30-40 percent more revenue than a single-aisle jet “with little or no additional cost”.

Airbus says its largest single-aisle, the A321neo, has already scooped up demand in the market above 200 seats.

    Tinseth said Boeing was meanwhile making progress in filling a production gap between the current 777 large wide-body model and its proposed 777X replacement, due to enter service in 2020. A contributing factor is a recent surge in cargo demand.

    “There are a lot of aircraft in the pipeline right now,” he said, adding the wider aircraft market is “very strong”.

    That strength coincides with a slew of available capital as new investors flood into the aircraft market looking for higher yields, despite the growing prospect of interest rate rises.

    “The asset class is real. It’s not a niche class any more,” Tim Myers, Boeing Capital Corp president, said on the same call.

    “We are in the most liquid financing environment I have ever seen in the industry.”

    Myers said Boeing was in talks with countries representing some of its suppliers to help provide last-resort export funding as the U.S. Export Import Bank remains offline for large deals, due to delays in the confirmation of top officials.

    Boeing is discussing potential funding with Australia after Britain and Italy stepped up last year, but Myers said it was nonetheless “extremely important” to unblock EXIM, which served as a valuable buffer against unexpected shocks in the market.

    Meanwhile, insurance companies could finance 5 percent of deliveries this year, up from 2 percent last year, he added.

    Reporting by Tim Hepher; Editing by Richard Lough and Adrian Croft

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