Chief Executive Officer Dave Calhoun said that Boeing won’t launch a new jetliner any time soon to address Airbus SE’s widening sales lead in the narrow-body market.
Prominent customers like Air Lease Corp. founder Steven Udvar-Hazy have been calling on Boeing to get moving on the mid-sized aircraft family Calhoun tabled two years ago. But there are no leaps in engine technology in sight to propel jetliner sales, and Calhoun said he isn’t willing to bet an expensive new development program on the current generation of turbofans.
The Boeing chief is counting on new digital tools to revolutionize how aircraft are designed, built and tracked over decades in the commercial market, concepts the company has touted for at least five years.
However, Boeing has been testing the technology on defence programs like the T-7 trainer and it isn’t yet “mature,” Calhoun said at the Bernstein Strategic Decisions Conference on Friday, June 3.
It will take “at least a couple of years before I’m confident that those tools are tested and mature enough to implement on the next airplane,” Calhoun said, citing an internal review. “When that happens, then we design the next airplane. We don’t do it the other way around.”
Calhoun reiterated that Boeing doesn’t plan to raise equity in the near term, and wouldn’t do so before 787 Dreamliner deliveries have resumed and the planemaker has tackled production issues with the 737 Max.
Boeing’s most comparable jet to the A321XLR is its in-development 737 MAX 10, the elongated variant of its current MAX series.
While offering just 14 seats less than the A321XLR, the MAX 10 falls significantly short in range, covering around 3,300 NM compared to Airbus’ 4,700 NM and 757-200s 3,915 NM, potentially restricting it from many trans-oceanic routes.
Chief Executive Dave Calhoun said on Friday the U.S. planemaker has no current plans to tap equity markets and signalled a wait of at least two years before launching a new aircraft program.
“There is no plan for an equity raise,” Calhoun told a conference organized by brokerage Bernstein. “I’m confident on the liquidity front. Cash flow is getting better every quarter. We’re at that stage now where we can start to quietly pay down debt.”
Boeing on 787 and 737MAX Certification
Calhoun also said Boeing had received a “clear” response letter from the U.S. Federal Aviation Administration (FAA) regarding its 787 Dreamliner certification package submission, but there was always work to do post-application.
Clearing a swollen inventory of twin-aisled Dreamliners and its best-selling 737 MAX is vital to Boeing’s ability to emerge from the overlapping pandemic and jet-safety crises, a task complicated by supply-chain bottlenecks and war in Ukraine.
Deliveries of the 787 have been halted for a year as Boeing worked through inspections and repairs in an industrial headache expected to cost about USD 5.5 billion. Boeing has more than 100 advanced composite jets parked in inventory, worth about USD 12.5 billion.
Calhoun also said the company is working to achieve production stability on its cash cow 737 MAX before it would entertain raising production rates. 737 MAX production and deliveries were hit by shortages of a particular wiring connector, Boeing said last month.
The planemaker is also facing an increasingly high-stakes battle to win certification for the largest variant of the 737 MAX before a new safety standard on cockpit alerts takes effect.
Missing the deadline for the 737 MAX 10 could require Boeing to revamp the jet’s crew alerting system and mean separate pilot training – raising costs to airlines and putting orders at risk.
Boeing has held talks with some lawmakers about asking for more time but has not formally sought an extension to address the flight deck issue.
“Let’s not get to politics, (let’s) work our way through the merits of the airplane with our regulator,” Calhoun said. “We are totally committed to these airplanes and we intend to deliver them to our customers.”
On winning clearance to resume 737 MAX deliveries in China, a vital market cut off by trade tensions between Washington and Beijing, Calhoun said he remained “confident and constructive” but stopped short of predicting a time frame.