Paris 2011: Boeing promises clarity, though no decision, on 737 replacement

Paris Air Show » 2011
June 19, 2011, 7:30 PM

It seems clear now that Boeing will not announce a decision on a successor to the 737NG at this Paris Air Show. But even the extent to which it will deliver on its promise to provide more “clarity” about its deliberations remained something of a mystery as the salon was set to open.

During a pre-Paris press briefing earlier this month at Boeing’s 737 plant in Renton, Washington, Nicole Piasecki, Boeing Commercial Airplanes’ vice president of business development, offered some clues, however. Most notably, she said the company would likely talk more about the size range an all-new narrowbody would occupy. She also said the “baseline” for such an airplane would include a composite fuselage, and could incorporate a single- or twin-aisle cabin.

“I don’t think that’s going to solidify this year in Paris by any means but the market is moving up a couple of seat rows,” she said, referring to the baseline size of the potential new airplane. “The heart of the market is the 737-800 [at roughly 160 seats]. We continue to see that for the next 20 years, but it is up-gauging a little bit, and so our airplane would optimize the heart of the market area but a little bit gauged up.”

Piasecki also stressed that Boeing will not rush its decision, regardless of the existence and early success of the A320neo. Customers want Boeing to “get it right,” she said, and the substantial backlog already in place for the existing airplane certainly doesn’t promote a sense of urgency. Piasecki insisted the 737-800, as it exists today, already offers 2-percent better per-seat operating costs than the A320neo promises to deliver in 2015. Boeing’s calculations show that a re-engined 737-800 would cost 8 percent less to operate than the Neo. An all-new airplane would deliver “at least” double that benefit, she added.

“We don’t have a decision date at the end of this year,” she said. “We will decide when we are ready. These are big, big decisions with lots of implications that we are approaching very deliberately and very carefully and we have the option to re-engine and we have the technology plans in place and team in place to do a new small airplane program.”

Piasecki said Boeing spent most of the first half of this year “deeply dissecting the marketplace” and talking with a group of customers about the various configuration possibilities. The company will spend the second half of the year analyzing the existing 737 production system and gauging its ability to “transition” into a new system capable of accommodating a rate of between 50 and 60 units per month.

Now building 737s at a rate of 31.5 per month, Boeing plans to raise the rate in Renton to 35 in January and to 38 in the second quarter of 2013. According to Beverly Wyse, 737 program manager, the company continues to evaluate yet another rate increase, to occur “about a year later,” to 42 per month, to help control a backlog of more than 2,000 airplanes. As circumstances stand today, a new customer has to wait until 2016 to take delivery of a 737, said Wyse.

In fact, Piasecki reckoned that customers will continue to take delivery of the existing NG for more than a decade, regardless of whether Boeing decides to re-engine or develop an all-new successor to the 737. That means years of simultaneous production of both the existing 737 and whatever succeeds it. “The transition is going to take time,” Piasecki said. “There are certain segments of customers that are going to want to keep their fleet; it’s a workhorse; it’s reliable. As the segments of the market move, you could see a low-cost type [of airline] wanting to keep [its] existing fleet going. The rollover of these large fleets will take years to occur.”

Southwest Airlines is an example. Piasecki stressed the importance of Southwest to Boeing’s thinking on the eventual size and shape of the NG’s successor. “We will address the requirements for Southwest and that may help define the sizing of the airplane,” she said. But with an all-new airplane unavailable until at least 2019, questions have arisen whether Southwest would prefer a re-engined airplane, which would arrive in the marketplace closer to the middle of this decade. “We are very engaged with [Southwest] on both alternatives,” said Piasecki. “And it is very much a part of our thought process.”

If Boeing does eventually decide to re-engine, CFM International, the current sole-source of 737 engines, appears likely to serve at least as the lead powerplant supplier. Boeing’s work with CFM now involves what chief program engineer John Hamilton described as “trades” to determine the optimum fan size the 737 could use without the need for a nose-gear extension. Last year’s studies–since shelved–centered on a 70-inch fan, which Hamilton said would require modifications to the landing gear. “As you go up in fan size, you get diminishing returns on fuel burn, so we’re really looking for that sweet spot and we haven’t defined that yet,” said Hamilton.

“It’s technically viable and we’ve been working on it for about a year. CFM is very supportive and ready and willing to move forward,” added Piasecki. “So that’s a program that we will continue to work and protect over time.” Asked whether Pratt & Whitney also has shown a readiness to proceed, Piasecki refused to comment.

“I’m not going to answer that for the reason that I really don’t know what I’m supposed to be saying right now,” she said. “Meaning I don’t know what we’ve publicly said about Pratt.” However, she did concede that Boeing has held talks with “all three” potential suppliers, including Pratt & Whitney and Rolls-Royce.

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