Boeing says mid-year decision on 737 line possible

MEXICO CITY (Reuters) - Boeing Co <BA.N> said on Tuesday it could make a long-awaited decision on the future of its popular 737 aircraft line by the middle of this year.

"We are doing a flight-test program to test improvements to the airframe and the engine to improve the efficiency of the airplane another 2 percent," Randy Tinseth, the marketing vice president for Boeing's commercial aircraft division, said of the 737 line.

"This, coupled with improvement over the last 10 years or more, means that the 737 we deliver in 2012 will be about 7 percent more fuel efficient," he told Reuters in Mexico City.

Boeing was still evaluating whether to build an all-new 737 line or add a fuel-efficient engine to the existing line.

"We are leaving our options open," Tinseth said.

The company expects to maintain its third-quarter delivery target for the long-delayed 787 Dreamliner, Tinseth said.

In a presentation to reporters in Mexico, Tinseth said the world's second-largest commercial plane maker expects Latin American airlines will need 2,180 new planes -- worth around $210 billion -- to expand over the next 20 years.

Separately, Tinseth said the company was working with the National Transportation Safety Board after a preliminary report on Monday revealed possible manufacturing flaws and more evidence of fatigue cracks in a Southwest Airlines Co <LUV.N> jet that experienced a mid-flight fuselage rupture on April 1.

"We continue to work with them and support them as needed."

(Reporting by Cyntia Barrera Diaz, editing by Gerald E. McCormick and Maureen Bavdek)