Boeing (BA) has been showing designs for a new midrange passenger jet to potential buyers like United Airlines (UAL) as it scrambles to counter the market share gains from rival Airbus (EADSY).
The new clean sheet design is for a twin-aisle widebody that seats 225-260 passengers and comes as airlines have increasingly turned to the single-aisle Airbus A321neo for trans-Atlantic and other midrange routes. That plane has taken advantage of a gap that was created when Boeing ended production of its midrange, single-aisle 757s in 2004.
As it races to answer the A321neo, Boeing earlier laid out plans to make a longer 737, the Max 10x, that carries 189-230 people for possible launch in 2020, as a stopgap while the new midrange plane gets ready.
So far, the response to what could be dubbed the 797 is positive, even convincing a once-skeptical United.
"We thought a twin made no sense, but we walked through it and had our questions answered," United CFO Andrew Levy told Bloomberg at the ISTAT conference in San Diego. "From what we've seen, we like it."
Boeing shares fell 28 cents to 181.74 on the stock market today. United shares rose 1.1%. Airbus closed flat.
IBD'S TAKE: Competition is seen rising on Atlantic routes with Delta Air Lines, United and American Air facing competition from overseas with Ireland's Ryanair and Air France-KLM.
But challenges remain for Boeing, which previously downplayed the idea of developing a brand-new plane and swore off new "moonshots" after a series of headaches making the 787.
Air Lease (AL) Executive Chairman Steven Udvar-Hazy isn't sure Boeing has figured out the right mix of price, performance and costs for the new midrange plane.
"I don't think Boeing wants to make a mistake, so they are really pinning down what it takes to make that airplane," he told reporters at the conference, according to Bloomberg.
The price tag could be especially tricky. Last year, Air Lease CEO John Plueger said he expected the new widebody plane would be priced closer to a narrow body.
Boeing is also facing pressure to launch the 737 Max 10X a year sooner. Plueger told Bloomberg earlier this week he wants the plane in March 2019.
Meanwhile, Airbus keeps racking up sales for its A321neo. Last month, International Airlines Group said it could buy more of the planes for its British Airways and Iberia units.
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