Boeing Considers Spreading Wings With New Plane

Boeing's commercial airplane boss sees big market potential for a new jetliner the company has been studying but still wants more time before committing billions of dollars to the project.

The decision is among the most closely watched in the aerospace industry by airplane buyers, Boeing suppliers and rival Airbus SE. Boeing, in the process, may revamp how it builds and sells planes.

"We do see a gap in the middle of the market between the single aisles and the twin-aisle" planes, Kevin McAllister told reporters on the eve of the Paris Air Show, the aerospace industry's biggest gathering this year where plane makers and their suppliers hobnob with customers. Mr. McAllister said demand for such a plane could be up to around 4,000 aircraft.

Still, Mr. McAllister, who joined Boeing from General Electric Co. in November, said he will not rush a decision. "Our focus right now is: can we put together a business plan that makes sense," he said, adding, "I'd rather take the time to do it right."

Boeing already has spent about three years talking to 57 potential customers about the prospective plane design. It would seat more than 200 passengers and be sized between Boeing's workhorse 737 single-aisle plane and the 787 Dreamliner long-range jetliner. The plane would enter service around 2025.

Meanwhile, Boeing is expected to introduce this week a new, larger model of its 737 which would seat up to 230 passengers. "We have a lot of customers very interested in the aircraft," Mr. McAllister said.

The larger, brand new plane would be aimed at flying trans-continental U.S. routes. Other potential uses include servicing trans-Atlantic city pairs that don't warrant a big plane, such as Washington to Prague.

Mr. McAllister said the new model under study could be sold with a greater focus on services. Boeing also may rebalance the plane parts it builds itself rather buying from suppliers. The company may also take a new approach to how planes are put together.

Customers are eager for Boeing to make a decision. "We have a gap with the aircraft available today from Boeing and Airbus," said Christian McCormick, managing director at China Aircraft Leasing Corp., though he is uncertain whether that gap warrants a new type of plane. "We are anxious what the results are and whether they consider the market is there," Mr. McCormick said.

Other potential customers have also signaled interest.

The aircraft under study would aim to replace the 757 jetliner Boeing delivered from 1982 to 2005. The replacement would be designed to seat 20% more passengers and fly 20% farther, Randy Tinseth, vice president of marketing for Boeing's commercial planes, said Friday.

Boeing said the twin-aisle plane would be built largely using existing technologies.

The jury is still out whether Boeing would select one engine provider or give buyers a choice. Engine makers said if they are the only supplier, they could offer Boeing a lower price.

For plane buyers the equation looks different. "The best stimulation for excellence is competition," Mr. McCormick said, "not just for the engine but also airframe type" signaling customers would like Airbus to offer a plane, too.

Airbus has said it is happy with its current mix of products and would wait to see whether it needed to respond to a new Boeing plane.

(END) Dow Jones Newswires

June 18, 2017 11:17 ET (15:17 GMT)