Boeing looking at B737 Replacement Options

M­emories of program mistakes are weighing on Boeing as it considers the timing of whether to re-engine or replace the 737 Next Generation family.

Two weeks ago, when Boeing CEO James McNerney told analysts that the company’s “current bias is not to re-engine [but] to move to an all-new airplane,” his comments were taken by some to mean that a new airplane is on the way. In fact, he was reiterating Boeing’s view that it cannot find a compelling business case to re-engine. But it has not made a final decision. The complexities of replacing the Boeing 737NG family, which is selling so well that Boeing is boosting production rates, is not easy. The single-aisle family accounts for 65-70% of Boeing’s airplane sales year after year.

When she recalls McNerney’s comments, Nicole Piasecki, the commercial airplanes vice president for strategy and business development, jumps on a phrase he used in a different context: “aggressive but responsible.” The need to be “aggressive” in a highly competitive market is obvious. Being “responsible” relates to “understanding where air travel is going”—the rise of low-cost carriers in burgeoning markets, for instance—­before building a new airplane, she says.

Airbus has opted for an intermediary step in the “what’s next” race with its A320 family New Engine Order (NEO) re-engining plan. The A320 will come first, followed by the A321 and A319. VIP corporate customers want the A318 included. “The market will decide,” says John Leahy, the company’s chief operating officer for customers.

Leahy expects “several hundred” A320NEO orders by the Paris air show in June and predicts that Boeing will pursue a clean-sheet aircraft design and then abandon it—like the Sonic Cruiser—to opt for re-engining because of the “low level of maturity” for “radically new powerplants” needed for a replacement.

Piasecki understands that customers may be confused by this back and forth. “We know that [they] need to know, need to have clarity around where we are going,” she says. “We want to see how the NEO is going to do in the marketplace. We want to see how the engine companies and airlines respond. We’ll know a lot more in six or 10 months.”

Piasecki has her own take on maturity of engine designs. For the NEO, Airbus is offering a choice of Pratt & Whitney’s PW1100G geared turbofan (GTF) or CFM International’s Leap-X, the follow-on to the CFM56-7B that powers 737NGs. Both must prove themselves, she says, especially the PW1100G, the maintenance of which she regards as an unknown. “We love the GTF technology,” she says. “We hope to be working very closely with [Pratt] to understand the technology. But nobody seems to be asking such a fundamental question, particularly as it relates to the NEO.”

Piasecki also says Airbus faces greater challenges and more complexity than it is acknowledging in the integration of the new powerplants on the A320 in terms of weight, new nacelles and struts. “You’ve got complexity in the production system, complexity in the design and, inevitably, the maintenance cost and reliability are big, big questions.”

Boeing is mindful that its shift to the NG from the second generation of 737s, called “classics,” was too abrupt for many customers. Its mistake was not to have a separate set of assembly mechanics to preserve the old line plus start up the new one. “By planning that way, we had to artificially shut [the classic line] down,” she says. “At the time, we had several customers that really, really wanted more airplanes and we couldn’t do that.”

It is not clear how Boeing plans to extend its NG line while developing a new airplane, since it has given no indication that it expects a marked increase in shop floor employment. But it has been nearly two decades since the NG was introduced and productivity is far higher now.

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