More than a decade ago, Boeing executives made a critical decision: To keep up with the company’s main rival, Airbus, they abandoned the idea of developing a new plane and rushed to update the 737, Boeing’s most popular plane. the company.
That effort culminated in the 737 Max, which had two fatal crashes in 2018 and 2019 and drew more scrutiny this year when a panel exploded on one of the planes during a flight in January. The plane’s problems have left Boeing behind Airbus in the global single-aisle jet market, which it once dominated.
Now Boeing, which is expected to name a new CEO by the end of the year, has another critical decision to make: When should it develop its next new plane?
If the company makes a misstep, it could spend billions of dollars and still lose market share to Airbus, which is based in Toulouse, France. Both manufacturers also face a distant but growing threat from China and growing pressure to reduce planet-warming emissions.
“That will be one of the most important decisions for whoever takes on the CEO role,” said Ken Herbert, aerospace and defense analyst at RBC Capital Markets. “Their legacy will be defined by what they do with the portfolio.”
Boeing declined to comment for this story.
Commercial aircraft are generally divided into two groups. Narrow-body or single-aisle aircraft, such as the 737, typically carry between 100 and 200 passengers on domestic flights in the United States. Wide-body or twin-aisle planes can carry more passengers over longer distances: from, for example, New York to London or Tokyo.
Boeing and Airbus sell many more narrow-body planes, but airlines are increasingly demanding larger versions of those planes because of limited gate and runway capacity at many airports and growing travel demand.
The Max was designed to compete against the Airbus A320neo family of aircraft. Experts say the verdict in that race is clear: Boeing lost. Airlines around the world have ordered many more Airbus aircraft, especially the largest, the A321neo. The European company’s leadership was cemented after the Max crashes, which experts blamed on poor design and engineering decisions, and the resulting 20-month global ban on the plane.
In 2019, for the first time, Airbus had more passenger planes flying around the planet than Boeing, according to Cirium, an aviation data provider.
The Max remains popular, especially among U.S. airlines, which have a long history of flying Boeing aircraft. The company is working to fill about 4,300 orders for the Max, an order book worth hundreds of billions of dollars. But Airbus has sold many more examples of the A320neo family, with more than 7,100 orders pending for the three variants of that aircraft.
Boeing still leads when it comes to larger twin-aisle planes, but Airbus’ dominance in the lucrative single-aisle market could reinforce itself, experts said. With more sales, Airbus can invest more in research and development. With more planes flying, you can earn more by selling parts and providing services.
“The whole time Boeing has been putting out fires, Airbus has simply been running its business,” said Ron Epstein, an aerospace and defense analyst at Bank of America.
Boeing has also squeezed everything it can with the 737, which debuted in the late 1960s. In developing the Max, the company pushed that plane’s structure to the limit. His next plane is likely to be one he builds from scratch, aviation experts said.
It was unclear what that new plane would look like or when it might arrive.
Dave Calhoun, Boeing’s chief executive, has said the company will not launch a new plane until the mid-2030s, in part because such a monumental effort would only be worthwhile when companies like General Electric, Rolls-Royce and Pratt & Whitney introduced more efficient engines.
But building a new plane could help Boeing fill a major gap in the market for larger, narrow-body planes, some experts said.
Airbus’ most popular aircraft by far is the A321neo, which has the most seats and can travel the furthest distances of the company’s three neo models. Boeing’s answer to that plane, the 737 Max 10, doesn’t fly that far and has not yet been approved by regulators.
Bank of America’s Epstein estimated last year that Boeing could sell 6,500 larger single-aisle planes to airlines, mainly to replace smaller, narrow-body planes. That plane could be developed in seven or eight years with an investment of up to $20 billion, and Boeing would generate at least five times as much in gross profits, he said at the time.
Some aviation experts also argue that Boeing and Calhoun have been too cautious in committing to a new plane, which they said could be more efficient even without waiting for new engines. Newer materials, different types of wings and other advances could help Boeing make significant improvements, they said.
“If you present the airlines with a reasonably good airplane, they will accept it,” said Michel Merluzeau, an analyst at AIR. an aerospace and defense consulting firm.
Some said that the longer Boeing takes to build a new plane, the more time Airbus will have to widen its lead. And while the new engines promise big improvements in efficiency, in practice they may fall short. Airlines may also be slow to purchase planes powered by those engines, especially after problems with current-generation engines, which have required more and longer repairs than expected.
But others said it would be wise for Boeing to wait. If the company moves too soon, Airbus could launch with an even newer and better plane.
Most analysts expect Airbus to launch a new plane in the middle of the next decade, around the same time Calhoun is targeting. Aviation experts disagree on whether Airbus would act first or wait to follow Boeing, but they say the European manufacturer is well positioned for either approach.
Developing a new aircraft is a huge task. Unlike wide-body aircraft, narrow-body jets are sold in larger quantities and therefore need to be produced quickly; Boeing and Airbus aim to produce dozens each month. To adapt to that pace, Boeing will have to develop a complex production system and prepare its suppliers. Airlines will also likely have to be willing to train pilots for a new plane, a costly and time-consuming process.
Ultimately, any new aircraft will also have to last decades, Calhoun said in an interview with Aviation Week, a trade publication, last year.
“Twenty years is a disaster; 30 years is a disaster,” she stated. “They have to last 50 years.”
Of course, Boeing wouldn’t start from scratch. The company and Airbus constantly develop and launch new techniques, technologies and tools. Boeing can apply lessons learned elsewhere, for example by developing the wide-body 787 Dreamliner, which it first delivered to an airline in 2011, or the upcoming 777X, a more efficient version of an existing Boeing wide-body aircraft. whose wing the company We will do it at home with composite materials.
The company is also working on experimental technologies. With NASA, Boeing is developing a longer, thinner wing supported by truss rods, a design known as the Transonic Truss-Braced Wing. It also maintains a research program known as ecoDemonstrator, which uses modified aircraft to test new technologies. Both Boeing and Airbus are also separately experimenting with the use of sustainable fuels, which can be produced from used cooking oil, waste, corn and other materials.
Aviation experts said building a new plane could bring new enthusiasm to the company after its recent troubles.
“If they can make it easier for people to like them, I think they’ll find there’s a lot of support for a new and improved Boeing,” said Rob Stallard, an analyst who covers both Boeing and Airbus at Vertical. Research partners.