It’s stunning news: Boeing may be shelving, at least for now, the prospect of a new airplane widely anticipated to be announced at the Paris Air Show.
Boeing previously shelved the prospective 737RE (Re-Engine).
Buckingham Research, a boutique New York investment bank with a good track record of forecasting Boeing moves, issued a note today in which it said Boeing is rethinking the new airplane. Buckingham writes:
BA changing course and; keeping options open. Our view has been that BA will develop a new airplane and not re-engine the 737. Further, both consensus and our expectations anticipate BA will announce a new 737/757 sized airplane at the Paris Air Show in June. We’re changing that view and do not believe BA will announce a new airplane at the show. We think BA may not gain an ‘approval to offer’ for a new airplane until late 2012/early 2013. With the potential for meaningfully lower R&D spend through 2014 as 787 R&D declines, we think that’s very bullish for…[Boeing].
Buckingham now does not expect any “new airplane” announcement at the air show.
Our own, independent information confirms that Boeing remains split internally about what it wants to do. Although the 737RE remains an option, it’s not particularly active and corporate officials in Chicago have frequently said they do not see a business case for the RE. We’ve been working on these developments since last week, and were largely sidetracked by the Southwest Airlines situation.
As for the new airplane, although Mike Bair, head of the 737 future airplane program, gave a series of interviews last month (including to us) in which he seemed pretty confident that a new airplane more or less centered on 180 seats as the optimal size, and for a 2019 EIS.
What we are told is that there remains a split about the size of the airplane–with some wanting to start in the 737-700 (140 seats) size while others want to begin around 180 seats. There also remains a split whether the airplane should be a single aisle or a twin aisle.
For more color on this, see our companion posts.