Boeing (NYSE:BA): 737 MAX to be Replaced by 2030


Boeing (NYSE:BA) CEO Jim McNerney has revealed plans by the aircraft making company of building a new aircraft to replace the then-old 737 MAX jet by the year 2030. The plans, which are in development, have proposed a new composite structure combined with a new engine for the new aircraft.

The move comes after Boeing (NYSE:BA) recognized and analyzed the tough competition it faced in innovative markets like China. According to McNerney, the new jetliner under development at the company is a bit larger than its predecessor, the new 737 MAX. However, no drastic changes have been made in its shape, hence the new aircraft will resemble the 737 MAX to a great extent.

In his statement released on Wednesday, McNerney revealed plans for the new plane by the company. Revealing details about the plane, McNerney said that there is “a good chance it will be a composite airplane…. It will be slightly bigger, there will be new engines.”

In China, Boeing (NYSE:BA) faces tough competition by COMAC, a plane-maker. COMAC announced the development of C919, a jet equivalent to the 737 MAX by Boeing (NYSE:BA). The aircraft by COMAC was expected to release by end-2014/early-2015. However, due to developmental delays, its release has now been delayed till the end of 2015.

This is not all the competition Boeing (NYSE:BA) faces in the aircraft manufacturing business. Other competitors to its 737 MAX are the Airbus A320, Bombardier CSeries, and MS-21.

McNerney, with the development of the new aircraft, hopes to beat the competition by being innovative and creative “because the new entrants would do something like MAX.” Even though Boeing (NYSE:BA) has a legacy of developing quality aircraft for the past 100 years, McNerney believes that for the company to sustain itself in the growing competition, “Innovation is the only answer, there’s no easy way around.”

Currently, Boeing (NYSE:BA) 737 and Airbus A320 are the two most popular choices for short-haul fleets worldwide, as they seat almost 155 passengers within a cost-effective aircraft. Almost all cheap-fare airlines use either of the two choices.

Previously, a complete replacement of the 737 had been proposed by the company. However, the idea was scrapped, and only some renovation was done on the 737. The resulting model came to be known as the 737 MAX, which was able to cut down on fuel cost by almost 15%, compared to its immediate predecessor.

Boeing (NYSE:BA), while developing the 737 MAX, had decided to scrap the idea of any major remodeling of the aircraft 737 before 2030. However, with the increasing pace of competition, Boeing (NYSE:BA) CEO McNerney now believes a newer version will have to be developed before 2030 to keep up with the competition.

Currently, Boeing (NYSE:BA) and Airbus are in a tough tug of war to capture the maximum market share possible, which would amount to $2.5 trillion, almost 70% of the total aircraft market, summing the next 2 decades.

Boeing (NYSE:BA) faces the most competition from Airbus A320neo aircraft, which was launched 8 months prior to the Boeing (NYSE:BA) 737 MAX and has captured 60 percent of the total market.

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