The Next-Generation.. and beyond

It’s not often you see Boeing and Airbus executives sharing the same stage. But it’s fitting for what is indeed an historic day in aviation. For all of you who’ve been wondering which direction we’d take on the 737 program, the answer is now clear. We’re excited to be part of today’s huge order announcement from American Airlines—the largest ever— on a day we also laid our single-aisle product strategy on the table.

American has agreed on an order for up to 300 Boeing airplanes. The commitment includes 100 Next-Generation 737s with options for 40 more—- plus 100 737s with new engines and options for 60 more. Pending approval from our board of directors, the new variant of the 737 would feature CFM International’s LEAP-X engines that improve fuel efficiency by 10 to 12 percent. We’re in the process of finalizing the configuration and expect a formal launch this fall with first delivery sometime mid-decade.

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Boeing and Airbus share the stage during the American Airlines news conference in Dallas.

Some of you may be wondering why we chose to go with a new engine instead of an all-new airplane. Jim Albaugh, CEO of Boeing Commercial Airplanes, said it best today. After talking with our customers, they wanted more efficiency now and certainty of delivery. We know we’ve made the right decision.

Today’s news proves just how aggressive American is being in its fleet renewal. In fact, the airline said no single manufacturer could pull it off alone. American’s current fleet of more than 600 Boeing airplanes includes 156 Next-Generation 737-800s delivered to date. The agreement builds on their existing backlog of 64 Boeing airplanes consisting of 51 737-800s, seven 777-200ERs and six 777-300ERs.

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The 787 Dreamliner heads home after making an appearance at DFW today.

It was fitting that the first 787 Dreamliner was on hand in Dallas for today’s announcement. American has an existing purchase agreement with Boeing to buy 42 787-9 Dreamliners, with the right to purchase 58 more 787s. We look forward to playing a key role in their fleet replacement plan.

Our new engine 737 doesn’t even have a name yet. But we can’t wait to make it part of our future.

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American’s future fleet includes the 737, 787 and 777.

Comments (42)

Bonario (Singapore):

Good job!! At last Boeing choose the re-engine version of 737. It is really odd for me to see 2 rivalring companies standing together at the stage.

But I'm still hoping for the Complete replacement of 737 and perhaps it would give more than 20% fuel efficient over 737NG. Hoping the best to come out from Boeing :)

Will there be a new call/name for the re-engined 737?

Jason McDowell (KMSN):

Congratulations, Boeing!

With the ever-increasing composite content of airframes, the formerly beautiful polished aluminum American livery is quickly transforming into a livery of gray and white paint.

Here's hoping American introduces a new livery that is less dependent on polished aluminum and that looks better as paint.

John Renavitz (North Brunswick, NJ USA):

Congratulations to Boeing on securing this order from American. While I have no business involvement with Boeing, I am an avid company follower and rooter. It sounds as if Boeing snatched a large portion of this historic order at the last minute. Their sales team should be commended for this success. However, I wonder if Boeing had made a commitment to re-engining the 737 sooner could they have further dented Airbus' penetration into this Boeing-exclusive customer. While I'm pleased Boeing secured this portion of the AMR order, I'm disappointed in them not winning the greater share, or shutting out Airbus entirely.

Jacobin777 (Silicon Valley):

Congrats on the major order Randy!

I was hoping AA to order more Boeing planes then its competitor but I guess one can't win 'em all! This particular order for Boeing was still big (and important).

Regardless, I think this is the beginning of many orders for the "B737RE" and I cannot wait to see how the plane compares against its various competitors. I also cannot wait to fly on one as well.

I'm sad however that the B739RE and A321NEO will be replacing the various B757's of the world. It is a plane which I have grown to love over the past number of years. From the way it flies to the "sleekness" of its looks, its in a category of its own.

Finally, I think both Mr. Enders and Mr. Albaugh showed more class than most when they said nothing but nice things about their respective competitor.

TC (Mt. Vernon, WA):

Too bad the 737 has run out of numbers, but there is one word that conjures up prestige throughout the northwest. How about the 737 "Renton Edition", 737RE.

Norman (Long Beach, California, United States):

Congratulations on American Airlines on the large 737NG order and launching the fourth generation of 737. The new 737RE should Boeing competitive for the next fifteen or so years against the A320NEO. Some of the things that I like to see on the fourth generation of 737 are the larger windows that are on the 787 and a 6,000 ft pressurization.

As American Airlines has become the launch customer for the 737RE I can imagine Southwest, Ryanair, Air Berlin, Alaska and Delta Air Lines following suit. Though the 737-900 is about as stretched as the fuselage and ground clearance will allow it to be I can imagine a "737-900RE" stretched lightly to allow 12 more passengers and a slightly greater wingspan so it can be a better competitor to the A321NEO and serve as a better 757 replacement with weight advantages over the A321NEO as a range similar to the 757 for which it will replace.

to (wa state):

good news on the reengine news, however, I wonder if by not building the more composite New Single Aisle (NSA) would Boeing be conceding that edge to the new entrants from Russia, China, Brazil, etc... someday real soon? With reengining Boeing has decided to push the NSA out further than 2019-2020 perhaps. That would seem like giving lighter composite opportunities to the new upstarts to leapfrog Boeing with their NSA's? Anyhow, great to hear the 737 has more promise for many future sales!

TimL (Long Beach, Ca.):

Congratulations to Boeing and the 737 team!

Now we need a snappy new name for a re-engined, fuel efficient 737, with the new Boeing Sky interior.

How about ... 737Streamliner. Or maybe 737SS.

V. L. (Everett, WA):

While I always like to see Boeing win orders, I'm disheartened that we chose to re-engine rather than re-design for a couple of reasons. First, it's not as exciting as an engineer to "update" a design, much like the 767 tanker and now the 737. This provides less incentive for new engineers to come work for Boeing. Products that push technological boundaries, such as the 787, show how the company leads in innovation. It's a shame to lose that edge.

Second, we're putting our future in the hands of engine companies to drive innovation and efficiency. Since we don't own the designs, our competitors have easy access to the same engines for their airplanes. Again, there goes our competitive advantage.

Have a combination of light-weight, more aerodynamic structures, improved passenger experience (larger windows, higher pressurization afforded by composites) and fuel-efficient engines would drive the market to us. Instead, we're following along.

Albert ((Boeing Auburn, WA )):

I have a name for the new 737:
737 SE
SUPER EFFICIENT

V V (Montréal, Québec):

I was shocked by the decision to re-engine the 737 now. I can only hope that the entry into service of the new variant, if you really decide to build them, is as early as 2014 or 2015. A re-engining has to be a blitzkrieg such that you don't put the backlog of the current model at risk.
I am wondering if LEAPX will become available by that timeframe.

Are you sure you want to do a simple re-engine on the 737?

I am also deeply shocked by American Airlines' decision. They have just bought four different engines, even if they are all produced by CFMI. There will be two different cockpit and flying philosophies. One will have the control yoke and the other will have side stick. One is fly-by-wire and the other is not.

It seems that the question of commonality is not anymore an issue. Perhaps American is also willing to throw the CSeries with the PW1500G into the mix? Jamais deux sans trois.

James Mitchell (Everett):

Now we have the time to do the blended wing body 737. Announce it and go for it!!! Time to change the game.

Vaidya Sethuraman (Chicago):

Randy, I am a Boeing fan and not happy about the way ,Boeing went about this decision on Re; to me , it is more a default decision than by design.
how is it possible that this great company which conceived something like the 747,777 and 787 , become a follower that too after your customer like AA ,who is married to you, almost gives away a 400 plane order to your arch rival?
Second, for almost six months now , Boeing has been indicating that they have plenty of time; and your sales team reacted to AA's moves -instead of learning from AA what were they looking for?
I am not trying to sit on judgment on B's product strategy , but somehow, RE story does not add up.
I thought after the way 37 NG came back and wrested the lead from Airbus, i thought , B would do a better job defending the 50/50 split of the market. I was wrong.
With Airbus calling the shots, Boeing seemed to be scrambling for AA's orders. I am worried more about DL and even WN.
Hope this is huge wake up call on medium term market realities in the narrow body, single aisle market-for my favorite airplane company.

Daniel Tsang (Hong Kong):

Hi Randy,

I regret to hear "technology was there. The production system of NSA was not well understood to produce it at 60 per month" for the NSA.

However, I start to understand the rationale behind Boeing's move in re-engining the 737.

With time for out-of-autoclave 2nd & 3rd-generation composite to mature, a mid-2020s NSA could make a lot of sense, along with the small twin-aisle concept.

A question, Randy: your colleague Mr. Jim Albaugh says the re-engined 737 would deliver a 12-15% fuel burn reduction, while you say it's 10-12%.

Which one is Boeing's official target on fuel burn?

Michael Bowman (Houston, TX):

First of all I think re-enging the 737 is best. With the sky interior, and brand new engines the a320neo doesnt stand a chance for long. I am an incredibly huge boeing fan and this is truly the right decision for the 737 legacy.

By the way, I think you should name it the "Skyliner", for the Sky interior, the legacy of the 737 and boeing alike, and it goes well with "dreamliner"!

rengab:

may i suggest the name for the new 737 version

Boeing 737 NGE New Generation Engine/Enhanced

Alvin Geurts (Australia):

I think what is really important here is that a large company has made a huge financial step in what is still regarded as uncertain times (for many countries). Hopefully this major investment by American Airlines will help stimulate business confidence in North America and also create more jobs within the industry.

And another thought that springs to mind. While it was all smiles and cheers on stage, we all understand that both Airbus (EADS) and Boeing are fierce competitors with one another. I previously worked at the world's largest gaming company (IGT) and while we in constant battles with out nearest competitor (Aristocrat), we did have our occasional olive branches with one another when there was common need like gaming regulations.

So I'm wondering are there times when they work cooperatively and if so, what areas?

Eddie Wong (Hong Kong):

Congratulations to Boeing!

Re-engining the 737NG would be a smart move, but I still Boeing will still continue the development of a new narrow-body jetliner, as 737 itself is still a relatively "old" design. Boeing used to make breakthrough often, like Dash-80, 747, etc. 787 is also a great breakthrough, and I always appreciate these breakthrough. I think the NSA would gain benefit from it.

PS Would the wingtips on P-8A help the 737NG become even more fuel-efficient than the winglets installed on the 737NG currently? Would they be available if the airliners want?

coy:

well well well. I am not entirely pleased with this development. I think this is a classical case of panic response by boeing to win this particular order. i think it's time the 737 is replaced with something new. It might be costly now but would definitely pay dividends in the future. The narrow body segment is worth trillions of dollars in the next 20 years, a new 737 is worth it!

Fred (Singapore):

Randy,
Congratulations on the AA order, and the way ahead on the 737 re-engine.

But the fact that Airbus has scored a major coup here, how this order forced Boeing to back down from the NSA and go the re-engine route, and the A320NEO's recent sales success leaves a very distinct impression that it's Airbus that is now in the driver’s seat.

Boeing needs to regain the initiative and reclaim this leadership. Don't forget the many airlines and lessors that wanted the NSA. Boeing should still aggressively pursue the NSA and launch it sooner rather then later. That way, the airlines that can't wait and those that can, both have a Boeing choice.

Does Boeing have the financial and material wherewithal to overlap 737RE and NSA development? Maybe it's time to take risks and bold steps again, like during the 747 days, that made Boeing great.

Russel Ahmed (Dhaka, Bangladesh):

BOEING ALWAYS PROVES TO BE BEST..........737 Re-engine option certainly proves the unparalleled efficiency of LEAP X........Truly sensational....AA did a great job of their Fleet renewal plan. These re-engined 737-800 will change the dimension of flying. FUEL EFFICIENCY AND LOWER OPERATING COST ROCKS THE SKY LIKE RAINBOW....

Sam Small (Seattle):

congrats on the AMR order, just wish we could have made this decision sooner. How about, 737NW (North West) since the entire region is envolved in its development!

FlyordieForum.com:

Congratulations to Boeing and the 737 team for such a remarkable achievement!

We were hoping AA to order more Boeing planes then its competitor but we are certain that the re-engined 737 + its Boeing Sky Interior will be two tremendous differentiators among its competitor in the short and mid-term..

Let us say it one more time.... If ain't Boeing, we are not going!

Cheers from the flyordieforum.com team!!

Paul (Tacoma, WA):

I am glad Boeing is putting a new engine on the 737NG, but I also think you should go ahead and start developing the replacement for the 737NG NOW. That way Boeing can stay way ahead of their competitors.

Tom Pang (Hong Kong):

Quite disappointed towards Boeing's decision.

customers want a completely new replacement, say with 7-seat abreast with 2 corridors. how long can a version with only an engine change last? I doubt it will lose competitiveness soon once more and more competitors like COMAC comes to the market.

Chris C (South Africa):

First and foremost, congratulations to Boeing and American Airlines on this significant order. Clearly, with the orders placed by AA for additional 737NGs, the 737 will remain the backbone of AA’s single-aisle fleet for decades.

I am, however, slightly disappointed that Boeing didn’t launch an all-new airplane to replace the venerable 737NG airplane family. Disappointed in a sense that Boeing is a technologically innovative company and I would’ve greatly loved to have seen Boeing lead the way once again in aviation, as done so on so many levels over the past nine decades, and launched an all-new single aisle airplane family that would’ve trounced the A320neo family and provided customers with a true, 21st-century single aisle airplane family. I believe Boeing has the technology, expertise and experience to design/develop and deliver a truly revolutionary single-aisle airplane; an airplane as revolutionary to the single-aisle market as the super-efficient 787 is to the medium wide-body market arena.

However, with that said, I’m confident that the new LEAP-X engines on the 737NG will allow the 737NG to remain a formidable force in the single-aisle market and provide strong competition to the A320neo family as well as oust out any pretenders to the thrown. The business cases to launch an all-new 737 or enhance the current 737NG must have been immense, and I can only imagine that with the decision by Boeing to enhance the 737NG, rather than replace it (at this stage), is the best business decision for the company, its customers, its suppliers and employees as the all-new 737 could possibly have been too much to tackle for Boeing, and the aviation industry as well, at this point in time.

I’m confident that the LEAP-X 737NG will pave the way for an all-new 737, as lessons learnt and technology honed from this variant will no doubt be used in the pursuit of an all-new 737 early next decade. The same can be said for Airbus and their A320neo.

Either way, airlines are now presented with a clearer path forward in the single-aisle market and both the LEAP-X 737NG and A320neo offer new, fuel efficient engines and improved performance. However, the 737 will have the new Boeing Sky Interior to add, and that, for me, is a clear winner for the 737.

I guess now we’ll see the much anticipated launch of the 787-10x (that’ll be a spectacularly beautiful, sleek looking airplane) as well as, perhaps, a launch of an all-new 777 family to obliterate the A350 family and secure the 787/777 product strategy.

My proposed name for the LEAP-X equipped 737NG family:
Boeing 737-10 (-700 with LEAP-X)
Boeing 737-11 (-800 with LEAP-X)
Boeing 737-12 (-900 with LEAP-X)

Freddy Hagens (Everett):

Congrats to all my Renton friends with this great order and extension of the 737NG program! Some of you once wondered if Renton would be shut down and consolidated elsewhere...Au contraire the Boeing legacy continues down there and the 737 is one of our star programs maintaining this legacy into the very far future.

John Renavitz (North Brunswick, NJ USA):

I was wondering what impact the 787 delays had on Boeing as they formulated their response to the A-320NEO. If the 787 were flying two years ago would Boeing have had a better opportunity to divert engineering resources to designing a new single aisle airplane to be available in, say, 2019 which would have put more of a damper on A-320NEO evaluations (and, sales!). I'll be interested in seeing how the "B737RE" offering competes in the future. I imagine that many other airlines are considering renewing their fleets considering fuel costs. With all of this potential activity in the future I would also imagine that other competitors (Bombardier, Embraer, China, Russia) will also have opportunities. Interesting strategic issues to be considered and resolved.

Young Boeing (Washington State):

Independent on the decision to re-engineer or build a new plane, I have to say that communications-wise, the way this was handled was poor.

Mr.Albaugh had continuously said that we were not going to be pressured "by a competitor" and that the decision on the 737 would come at the end of the year. However, the announcement of the 737 decision coming at the same time as the American Airlines announcement makes it seem like a knee-jerk reaction to counter the Airbus ambush.

While I don't believe that the decision was a knee-jerk reaction (I have faith that our executives were coming close to a decision anyways), the timing makes it seem like we DID react to the competition, and that the decision was NOT as well-thought out as we promised it would be.

It's hard for me to assess all the variables of this decision from my position. I am not equipped with the information, neither am I bestowed the pressure to make the tough decision that our executives have to make. But for an organization's whose motto is to "revolutionize flight" a 737RE is good, but hardly revolutionary.

Regardless, I am optimistic about the future, and I hope to be wrong about my reaction to this decision.

Thank you for sharing Randy.

James Joyce (Newcastle-upon-Tyne, U.K.,):

I hope the latest 737 can be the best of its class.

James Joyce.

Ron H (San Francisco, CA):

I got an idea from one of the blogs suggesting 737NW for "Northwest"- how about the 737EG as in "Ever-green"? A little double entendre here...

Khan (BSC):

Can we imagine the fuel efficiency a complete redesign with composites similar to the 787 would have bought to the table. Eventually a composite aircraft will be the 737 replacement of tommorow. Lets hope we beat Airbus to it.

Daniel Tsang (Hong Kong):

Hi Randy,

I think this re-engined 737 could repeat the runaway success of the 777-300ER/777-200LR.

A slightly tweaked 737NG airframe which improves better aerodynamic + a CFM LEAP fan size that features best fuel burn = a great re-engined 737.

This is certainly achievable with a US$3 billion price tag of a re-engining program. Like the program launch of 737 NG in 1993 & its EIS in 1997, a 2017 EIS for re-engined 737 could very well enable Boeing achieve this.

If true, this would be a successful "derivative" 737 instead of just putting new engines onto 737NG.

Daniel K (Sydney, NSW, Australia):

Congratulations Boeing on the large order from AA.
Funnily I was just asking about this particular issue about a week ago.

I can understand the logic behind the Re-Engine option of the B737. Being a single aisle plane with massive demand, Boeing would have to ensure it was able to meet the production rate targets. A predominantly composite plane such as the 787 would place great challenges on this.

However I truly hope that Boeing does incorporate more composites than its largest competitor and re-claim back a lot of future orders.

I guess the sad thing about keeping the same basic airframe is the slight lack of width in the 737 cabin, but I'm glad the intelligent Boeing Sky Interior does appease this somewhat.


keesje (netherlands):

Relieved Boeing took this decision. The way it happened is a different story.. Anyway, I hope this 737RE secures a healthy competition in the 2015-2020 time frame and after. rgds

John Renavitz (North Brunswick, NJ USA):

Fascinating discussion on this interesting topic of vital importance to both Boeing and Airbus. I can't help but get the feeling that Boeing reacted to the Paris Airshow sales, and the potential of being shut out during the American negotiations allowing both to force their hand on the RE option. I fully agree with several of the posts in that Boeing should be looking to lead on the creation of the next generation single-aisle aircraft. The market is huge, and although the risks are great the upside is almost incalculable. However, from a business perspective how quickly do you want to render one model obsolete before you replace it with another? I would think that Boeing must recover some of its RE development costs before replacing it with a new airplane. Product strategy development at this time must be exciting and highly pressurized for those involved. As an engineer, I would be willing to bet that designing and building the thing would be easier than deciding what and when to build it.

John Renavitz (North Brunswick, NJ USA):

I just read an interesting article regarding Rockwell Collins' having stated that they would like to put a 787 type of cockpit on the RE'd 737. I'm now wondering what other upgrades are part of the eventual Boeing 737 offering in addition to the Sky Cabin and possible cockpit technology upgrade. Can Boeing out technology and out market Airbus' A-320NEO? Should be an fascinating coupla' months. Best of luck to Boeing.

Tom Auer (Seattle, WA):

That was an interesting decision... and some nice stepping on Randy's part to make the announcement seem a bit less abrupt and backward. I have no doubt the decision was a combination of a lot of work on the future of the 737, combined with the pressure of a large order.

Having said that, it will be interesting to see how much the re-engined 737 is different from the existing models. New engines, new nose gear, and some strengthened parts? I wonder how hard it would be to mate the 757 cockpit section (1970s design) with the 737 body, to replace a 1950s design cockpit section.

Adolfo Pedregosa (Hong Kong SAR China):

The B737 continues to amaze. It keeps on breathing new life when critics continue to thumb it down.

Oh I love this plane. In production since 1967.
Congratulations Boeing. Don't let the detractors bring you down.

Alvin Geurts (Australia):

A lot of people seem to love the Airbus V Boeing rivalry. And while rivalry is good in that in stimulates or encourages a company to "lift the game", what we're seeing a lot of these days is companies "changing the game".

I think it is safe to say that Airbus got the A350 wrong in it's first iteration. So after substantial redesign, we got the A350XWB. And when comparing apples with apples, they're offering a plane that competes with the yet to be delivered Boeing 787-9 and the current Boeing 777-200 and 777-300. The battle against the 787-8 was well and truly lost so they decided to "change the game" to their needs. And what company wouldn't?

The Boeing 737RE (Re-Engine) or NG2 as I like to call it, is a game changer in the same way as the A350XWB as it will be a very strong competitor to Bombardier's C series and against the A320neo in short haul operations.

Given that the A320neo will have a bigger diameter fan and have increased weight to support the bigger engine, I am inclined to believe that fuel savings over short haul operations will be very minimal. However, it does seem to have the numbers in it's favour for medium to long haul such as trans-continental USA, trans-continental Australia, and Australia-SE Asia.

In Australia, we have some very heavily trafficked short routes like Sydney-Melbourne which I believe is the third or fourth most busy route in the world by passenger numbers. And with both Qantas and Virgin Australia (nee Virgin Blue) flying this very regularly with Boeing 737-800's, the 737NG2 would be the perfect plane for the circa 75min flight between these two cities. And I'm certain that there are numerous other similar examples of this within Europe, The United States and even South America.

So even though airlines have in many aspects tried to minimise the number of types of aircraft in their fleets, I think we'll see some changes to this as we will shortly have aircraft that are really well suited to specific roles.

The future will be interesting, indeed.

John Renavitz (North Brunswick, NJ USA):

Bloomberg had an interesting article this morning about AMR's "Project Apollo" which was of course a code name for AMR's huge purchase of Boeing and Airbus aircraft. According to the article, Airbus was the first to put a proposal on paper, and the first to offer creative financing allowing AMR to lease the jets rather than buy them. The article reported that, "Chicago-based Boeing was still surprised to learn how far the discussions had progressed and how large the deal might be." Considering the strategic importance to Boeing of a US-based airline such as American, I would hope this is anti-Boeing reporting more than it is factual. If true, Boeing was less aggressive in pursuing AMR than I would have thought they would be. Further today Reuters reports that Airbus discounted prices nearly 70% (67%) and Boeing 55% to win their shares of this order. EADS denies the magnitue of the discounts stating, "The rumours are completely unfounded. The A320 deal is a perfectly normal market deal and the A320neo deal fully acknowledges the value this brings to the customer." Wow! It sounds like competition in this arena is going to be fierce.

Alessandro (European Union.):

A conservative choice, I think its the right decision after all the problems with Boeing 787 and the new 747.
I wonder how many whom worked with both 737 and 747 design back in the 1960ies would´ve thought they still be sold in 2011? Very few I say.

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