Key Boeing jetliner project rethink orders new CEO
The new CEO of Boeing Co has returned the aerospace giant to the drawing board on the proposals for new medium-sized aircraft and is effectively putting forward plans worth US$15-20 billion dominated by the 737 MAX crisis in his current form.
A decision to delay a 220-270 passenger New Midsize Airplane (NMA), which seemed warranted a year earlier, had been postponed because Boeing paid attention to the development of the smaller 737 MAX following two deadly accidents.
Yet days after taking the reins during Boeing’s 10-month reputational nightmare, CEO Dave Calhoun said that the rivalry had shifted.
“Since the first clean sheet of paper was taken to it, things have changed a bit… the competitive playing field is a little different,” he told reporters on the Wednesday conference call.
“We’re going to start with a clean sheet of paper again; I’m looking forward to that,” said Calhoun.
He also spoke about a new market strategy.
A Boeing spokeswoman said Calhoun ordered a new analysis of the type of aircraft required. New aircraft usually takes 6-7 years or longer to produce when a decision is made, while Boeing is hoping to reduce that partially by way of digital technologies and new business models built around the NMA.
Calhoun “has asked the team to assess the future market and what kind of aeroplane is needed to meet the future market,” said Gordon Johndroe.
Noting about two and a half years ago that the original NMA assessments were made, the new study would “build upon what has been learned… in design and production.” Further evidence of a change in pace indicated that the meeting with a significant supplier, initially scheduled for next week, was abruptly cancelled without a new date.
It compares with the strategy only a few weeks ago where Boeing already approached several airlines with new details of the NMA, including the NMA and an “advanced” framework according to the slide seen by Reuters.
The NMA was designed to deal with a narrow distance between one-aisle work-horse jets such as the 737 MAX and long-haul wide-body jets such as the 787.
Nevertheless, much of the focus was made around a new production framework, which not only embraced the NMA but laid the foundations for the next single-aisle aircraft after the 737 MAX.
Calhoun said that he hoped that the MAX, whose return to operation had been postponed earlier this week again, will restore its former market position and continue in business for a decade.
Boeing has traditionally fallen behind in the sales of the largest single-aisle category, like the 200-240-seat Airbus A321neo, which covers the niche of NMA-targeting.
Boeing has already risked losing the sweetest part of the market by delaying a decision on the NMA, especially after Airbus has signed contracts with two major US companies, analysts said.
Analysts have also questioned whether Boeing would lose appetite for such a costly project, given the costs equivalent to a new MAX crisis repair program and delays on its big new 777X jet whose maiden flight is scheduled for Friday.