It’s being reported by Aviation Week that a Morgan Stanley financial analyst is now predicting that Boeing will soon announce a 737 replacement development program.  See that article HERE.  Her reasoning is somewhat sound but is also tinged with a financial analysts viewpoint. 

Financial analysts see a re-engine program adding little if anything to Boeing’s financial performance.  A new aircraft would potentially garner hundreds if not thousands of orders during the development period and that backlog of orders would offer confidence to the financial world.   Fortunately, engineers run Boeing.  Creating an aircraft for the sake of a balance sheet is an unwise move unless many other criteria are met as well.  Most of those criteria are engineering related such as engine development maturity, new materials (CFRP for instance) maturity, etc.

This analyst also speculates that a re-engined B737 vs a re-engined A320 could still be 8 to 10% less efficient than the Airbus product.  Now her engineering prowess is really showing.  The two aircraft are neck and neck now.  Both would need substantial engineering changes to accomodate a new engine.  The new Pratt & Whitney GTF engine still is not showing the performance that has been promised.  In fact, in a Boeing vs Airbus matchup between like models, the Boeing generally has the lowest trip costs so far.  It’s an almost insignificant advantage but it exists and it shows this analyst hasn’t done too much homework.

Finally, there is more talk of this new aircraft being a twin-aisle development for faster boarding.  This one I doubt.  A twin-aisle wouldn’t just require a larger fuselage but it would potentially be heavier if kept as a circular cross section.  A new fuselage shape might lend itself to such a development but I really doubt it.  The 737 market is from about 130 to 180 seats.  A twin aisle means a shorter length and that means things like a taller tail.  It would imply more “structure” being necessary and more structure generally means more weight.  More weight means higher costs.  Perhaps a new fuselage shape might work but that means lots of new engineering and materials potentially.  I wouldn’t rule it out completely but I would give it an extremely low probability. 

That said, I would be less surprised to learn of a “twin” development of two sub-families somewhat similar to the 757/767 developments.  An aircraft family capable of serving from 120 to 160 passengers and, perhaps, another serving 160 to 200 passengers with a great deal of commonality might be the answer everyone is looking for.  That would allow Boeing to optimize their aircraft structures for missions in those categories and, at the same time, potentially offer commonality in engines, aircraft systems and pilot ratings. 

I continue to believe Boeing will announce a new program in the next 18 to 24 months.  I do believe it will be for a single aisle airliner(s) and I do believe that it may have an entry into service late in the decade.  Everything else is just a guess.  For earlier comments on this, you can read THIS blog entry. 

The argument that current 737 owners are afraid that a re-engine or new development program will hurt their aircraft values is barely valid.  It may hurt their values but if Boeing can engineer a new aircraft meeting offering a great gain in efficiency, then it is time to start developing it.  If they cannot, then they’ll wait.  There is no value to either Boeing or the airlines in waiting longer than necessary.  When the risks reach an appropriate level, they will launch this.  The question is, have those risks gotten to a point that they are acceptable?

Filed under: Aircraft Development by ajax