Boeing CEO Jim McNerney is providing some interesting new detail on the timetable for the re-engined 737, and some clarification over the apparent differences between American Airline's 2018 entry-into-service date and earlier statements that the aircraft is aimed at a 'mid-decade' horizon. Speaking at today's second quarter financial results McNerney says the timetable "is less about when we get it done and more about when American Airlines can take it."
Boeing Commercial Airplanes president Jim Albaugh said in June that the aircraft is aimed at a 'mid-decade', somewhat earlier than the American delivery schedule of 2018 would suggest. Now it seems that re-engined 737s could be available to other customers before American receives its first aircraft, and McNerney confirms Boeing is currently "in talks" with other airlines. Watch this space for more 737RE operators soon.
"We believe our current marketshare can be held and there is robust demand for the re-engined airplane. Given our strategy to incorporate the new (engine) technology efficiently it presents a low risk, low capital way to access this capital growth as opposed to an all new NSA. The demand is there, i'm convinced of it, particularly in the developing world as well as in the United States."
On the terms of the deal with American, McNerney denies that the contract will be unprofitable for Boeing as would have been the case had it continued with the much-publicized Ryanair fleet renewal deal in 2010. "Walking away from the Ryanair deal was the right thing to do. It didn't make sense for us or Ryanair - but this one does. The American Airlines competition did get pretty heated as Airbus wanted to come in and get marketshare. It was pretty aggressively priced - but not irresponsibly priced from our standpoint. But I can say its a very profitable deal for us and American - but the dynamics were i ntense," he concedes.