The next 737 - an all-new airplane?



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Posted on May 5, 2010 at 7:16 PM

Updated Wednesday, May 5 at 7:16 PM

RENTON, Wash. - If speculation has a season when it comes to new airplanes, it's already started. What will Boeing do when it comes time to replace Boeing's venerable 737, the world's most popular jetliner by far.

We know the time frame. The company will announce its decision by the end of the year. The question is, what's the decision?

We are now getting some insight.

Tuesday in New York, Boeing Capital, the company's division that provides financing to airlines as well as some horse trading with airlines to help keep its assembly lines humming, held a conference for stock analysts in New York.

Wednesday, we're hearing the first take on what those analysts heard at that meeting.

Richard Safran, with the Buckingham Research Group in New York, said in an e-mail this morning: "...we think BA (Boeing Aircraft) may be leaning towards a new design to replace the 737."

Boeing has made no secret of the fact that it thinks the current model of the popular plane, also known as the "Next Generation 737" is about due for an upgrade. The question is, what comes next after "next."

In my March interview with Jim Albaugh, the current chief of Boeing's Commercial Airplane Division, told me the company is planning to make the 737 decision and a decision about what's next for the 777 in the December time frame.

But when it comes to the popular 737, now being built at the rate of about 31 airplanes a month in Renton, does Boeing simply make some design changes and upgrade to accommodate a new type of high-efficiency jet engine known generically as the geared turbofan, or start over with a clean computer screen, the modern equivalent of a clean sheet of paper.

Wednesday, Liz Verdier, Boeing's spokeswoman for New Product Development, told me nothing's changed, and engineers are considering a lot of options.

"Everything's on the table," she said.

But the 737 doesn't exist in a vacuum. It has competition - from the Airbus 320 family to new jets being developed in Canada and China and even Russia that could carve into the smaller 737 sizes, generally below 150 seats.

Scott Hamilton of Leeham and Co. says Boeing may take a gamble that Airbus may commit to re-engine its A320 and put it at a competitive disadvantage against a totally new 737.

Whether a new Boeing jet is even called a 737, or a 797 or something else, also remains to be seen.

But the best bet is that the educated analysis of people like Safran and Hamilton to the outright guessing by some others is almost sure to increase over the next six or so months as Boeing zeroes in on the next step.