Sept. 13, 2018, (c) Airfinance Journal: Air Lease’s executive chairman Steven Udvar-Hazy says that Boeing could make a decision on whether or not launch the 797 model mid-year 2019.
If so, the timing could coincide with the Paris Air Show.
“In the NMA market, whether Boeing will launch the 797 is a ‘multi-billion dollars question’, he says, adding that right now the US manufacturer is assessing the engine availability.
“There are two potential engines applications. They are all derivative engines,” he says at the UK Aviation Club Lunch on 13 September.
“We all know the problems that Airbus and Boeing have been going through with the new engines on the Max and the Neo as well as the 787s,” he adds.
And for him Boeing is very ‘cautious’ on a decision. “They are trying to understand what is the real market demand for this aircraft and all indications points out to a decision sometimes in the middle of next year,” he says.
Boeing chairman, president, chief executive officer & director, Dennis Muilenburg, said Boeing is making a good progress on the business case.
“A key for us is whether we can close the business case and make it economically viable. That’s the work that we’re doing right now. We’re making good progress on that and encouraging progress, but we’ll make the decision at the right time,” he said at the at the Morgan Stanley conference on 12 September.
“We’re protecting a 2025 entry into the service date for our customers, so we’re doing risk reduction work in parallel to protect the schedule,” he adds.
“There’s an opportunity there that provide a value proposition for our customers in between our current narrow-body and wide-body fleets. We do think the market is there. Our assessment is showing us it’s about 4,000 to 5,000 aircraft, great customer discussions there on what will create value,” he said.
“A key for us is whether we can close the business case and make it economically viable. That’s the work that we’re doing right now. We’re making good progress on that and encouraging progress, but we’ll make the decision at the right time. We’re protecting a 2025 entry into the service date for our customers, so we’re doing risk reduction work in parallel to protect the schedule. And I expect this as a launch decision that we’ll get to next year, and that will put us in good position if we decide to proceed with the program.
Services from Boeing Global Services, the after-market division, is an increasingly important part of the equation.
“It’s a big part of how we’re looking at that future airplane. Not only are we looking at the net present value of the airplane itself and our traditional business case analysis, but also, with the investments we’re making in services and verticals, how does that create life-cycle value that could be factored into the business case,” Muilenburg said. “And it’s a different way of looking at a future system. So, again, we’re going to continue to do our work. We’ll be very disciplined. We’ll make a good business-based decision and one that creates value for customers.”
The market expects Boeing’s board to grant Authority to Offer the airplane for sale, perhaps in the first quarter, but this timing has been slipping.
Additional reporting by Leeham News.