Boeing Co predicted it will need until the end of next decade to bring its next-generation single-aisle aircraft to market as it continues to repair its finances for the huge investment and customers still buy its current model.
Speaking in an interview at this year’s Farnborough Air Show, Chief Executive Officer Kelly Ortberg said the company isn’t ready financially to launch the new jet, and the demands of the market are also not yet in place.
“The market is not quite ready for the new airplane,” Ortberg said in an interview with Bloomberg Television’s Guy Johnson. “The customers are telling us, let’s focus on the existing product.”
Ortberg said Boeing will need “another couple years” to ramp up production on its existing 737, helping it “improve our positive cash flow and pay down some debt.”
“We want to be ready when the market’s ready,” the CEO said, adding that the new aircraft would probably launch “in the neighbourhood” of the end of the decade.
Ortberg’s timeline suggests that Boeing is walking a conservative line bringing its 737 successor to market, a pivotal decision for the manufacturer because that plane brings in the bulk of cash for the company.
The decision on the timeline and the technologies included are closely watched by investors and customers, given that Boeing and Airbus SE are locked in a fierce duopoly in the global civil aviation market.
Airbus, for its part, has laid out a slightly swifter timeline that suggests it may seek a new version of its A320 earlier in the 2030s. Both the 737 and the A320 families are by far the most widely flown aircraft category, making up the biggest chunk of the two companies’ backlogs.
Getting the timing right is key. Introduce to model too soon, and some technologies might not yet be sufficiently advanced, and customers may switch out of the current models that are still selling well. But wait too long, and either manufacturer risks ceding ground to its rival.
The jockeying for the next plane is reminiscent to some degree of the dynamic that played out over upgraded models for the A320 and the 737. Airbus was first to put new engines on its model, calling it the A320neo. That move proved a hot seller with customers, forcing Boeing to pull even whit its 737 Max.
