Boeing seeks $1 trillion in orders with new 737 Max

Boeing Co is counting on the 737 Max, the new version of the world’s most widely flown jetliner, to help capture half of a $2 trillion market in the next 20 years and fend off a challenge from Airbus SAS. Powered by more efficient engines, the 737 Max has already won 496 order commitments in “a very positive indicator of demand for what has been viewed as a ‘me-too’ offering,” Robert Spingarn, a New York-based Credit Suisse analyst, said Tuesday in a note to clients. Deliveries of the 737 Max should begin in 2017, two years after Airbus’s upgraded A320neo, Boeing said Tuesday after its board gave formal approval to the jet. The commitments are spread among five different customers, the company said. The directors’ go-ahead followed an agreement in July to sell 100 of the jets to American Airlines as half of an order with the Chicago-based planemaker. American split a purchase of 460 aircraft between Boeing and Airbus, which began offering more fuel-efficient engines on its A320 narrow-body in December. The Airbus order broke an exclusive arrangement between Fort Worth, Texas-based American and Boeing dating to 1987, compelling the planemaker to shift to the quicker, cheaper option of upgrading the 737 from its stated preference of developing an all-new jet. Boeing’s 20-year forecast projects global sales of 23,000 narrow-body jets in the next two decades, at a value of almost $2 trillion. The company ranks second in commercial deliveries to Toulouse, France-based Airbus, which has rung up more than 1,000 orders and commitments since unveiling the A320neo in December. “This is an airplane that’s going to allow us not to just maintain the market share we have, but one that will allow us to grow the market share,” Boeing Commercial Airplanes President Jim Albaugh said at a news conference in Renton, Washington. Boeing should be able to command a premium price for the new version, said Albaugh, who declined to comment further. The average 737 has a catalog price of $78m. The Max will use modified Leap-1B engines from CFM International and offer 7 percent lower operating costs than rivals. “In today’s operating environment, it is critical for us to maximize the fuel- and cost-efficiency of our fleet,” said Vasu Raja, managing director for corporate planning at AMR Corp.’s American. “Boeing’s latest evolution of 737 product is an important step forward for airlines and our customers.” From / Arabian Business news