Boeing Considering New 737 Model
22 April 2016 - 5:00AM
Dow Jones News
Boeing Co. is considering another version of its new
single-aisle jetliner to fend off competition from a new Bombardier
Inc. passenger jet, according to people familiar with the
situation.
The proposed plane would seat around 150 passengers in two
classes and replace the smallest version of the Boeing 737 Max,
which is due to enter service in 2019. The first model of the Max,
an update of the best-selling workhorse jet, is currently being
tested and is due to enter service first with Southwest Airlines
Co. next year.
Internally dubbed the Boeing 737 Max 7X, the plane would fly
significantly further and carry more passengers than the 126-seat
model which it would replace, the people said.
Boeing needs to win backing for the plan from United Continental
Holdings Inc., which recently purchased 45 current-generation 737s,
and Southwest, which is also due to take the first of the smallest
model, according to a senior industry executive. The smallest
version has only garnered 60 orders.
The proposed new model would include major portions of the
162-seat Max 8, including a shortened version of its fuselage. The
concept is a less-expensive option than customizing parts such as
the wings. Sharing components lowers development and production
costs, which Boeing can use to cut sale prices.
A Boeing spokesman declined to comment, citing company
policy.
Mike Van de Ven, Southwest's chief operating officer, said on an
investor call that he'd "heard rumors" about a new 737 version.
"Absolutely we'd want to go out and consider different options
out there," he said, adding that "there have been no thoughts of
adjusting" the 30 firm orders Southwest has for the smallest
version of the Max.
Boeing has employed a similar strategy to make a version of the
Max with 200 seats. The company has already signed up low-cost
carrier Ryanair Holdings PLC for that plane, which is the same size
as the Max 8, but includes two new exit doors to accommodate an
increase in the jet's cabin capacity.
Reworking its single-aisle jet lineup reflects the traction
Bombardier is getting with its CSeries jets. Boeing was forced to
offer United steep price concessions to win orders this year in the
face of competition from Bombardier. Delta Air Lines Inc. is
expected to complete a deal with Bombardier for up to 125 aircraft
later this month, according to people familiar with both
campaigns.
In addition to being used to court airlines, the design could
also serve as a military platform or an ultralong range business
jet, said one of the people familiar with the study.
Write to Jon Ostrower at jon.ostrower@wsj.com
(END) Dow Jones Newswires
April 21, 2016 14:45 ET (18:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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