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Boeing to redesign 737 engine amid Airbus competition

Lufthansa Boeing 737-300. A file photo.

NEW YORK (AP): Boeing has landed approval from its board to build a version of its 737 with a redesigned engine in an effort to quickly match growing competition from rival plane maker Airbus.

Boeing said Wednesday it has received commitments for 496 airplanes with the new engines from five airlines. Its shares rose more than 2 per cent in morning trading.

The redesign was spurred by a major airplane order by American Airlines last month. The airline, operated by Dallas-based AMR Corp, said it would order at least 460 new jets, split between Boeing and Airbus. The deal ended Boeing's exclusive grip on the fleet of the country's third-largest airline.

The Chicago manufacturer, a massive company that typically plans years in advance for airplanes it will build for decades, made a lightning-fast turnaround. A growing number of orders for a competing plane made by Airbus, capped by American's willingness to place a big order, forced Boeing's hand.

Boeing Co. had been weighing whether to bolt a new, more-efficient engine onto its 737, or build an all-new plane.

As recently as May, Boeing said it was leaning toward building a new plane.

It says the new "re-engined" 737 will have lower operating costs than any similar airplane, including Airbus' comparable single-aisle jet, the A320. Airbus calls its new-engine version the A320neo, for "new engine option."

Deliveries are scheduled to begin in 2017.

The 737 is assembled in Renton, Washington, the A320 in Toulouse, France. Both planes are already in such high demand that their makers are boosting production to 42 per month, Boeing in 2014, Airbus by early next year.

Boeing shares rose USD 1.44, or 2.2 per cent, to USD 66.04 a share in morning trading.


Boeing  Airlines  Airbus  

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