BOEING Q2 PROFITS RISE; MCNERNEY DEFENDS RE-ENGINE DECISION

Dino D'Amore
By Dino D'Amore July 28, 2011 10:22

BOEING Q2 PROFITS RISE; MCNERNEY DEFENDS RE-ENGINE DECISION

When announcing a 20% increase in Q2 profits, Jim McNerney, chief executive of Boeing, stated that the decision to launch a re-engined 737 was a measured and carefully thought out decision, and was certainly not something Boeing came up with at the last minute in order to win the American Airlines deal. In an interview with Airline Economics, Kostya Zolotusky, managing director of Capital Markets Development for Boeing Capital Corporation (BCC), confirmed the fact that the decision to re-engine the 737 was taken at the same time as the American order was a “coincidence”. It is unlikely that many will believe such a statement as it is clear from reports from the airline, Boeing and Airbus that this deal was aggressively fought. McNerney told Associate Press: “I would say that obviously the American competition did get pretty heated, as Airbus, who hadn’t sold planes there in a number of years, wanted to come in and get market share, and did get some market share there. It was pretty aggressively priced, but not irresponsibly priced, from our standpoint. Airbus can speak for themselves. What I can tell you is that this is a very profitable deal for us, and for American. … I’m not uncomfortable with the pricing level there, but I think the competitive dynamics were a little more intense.”

McNerney said that the decision to re-engine the 737 was a “low risk, low capital” one that means the US aircraft manufacturer can bring a more fuel efficient aircraft to the market much sooner than it will take the build an all-new airplane. However, Boeing has not ruled out building that all-new narrowbody aircraft and now has more breathing room to do so. The only question now for them to answer is exactly how they plan to fit the CFM Leap-X engines under the existing 737 airframe and how much will that cost? Answers to me at victoria@aviationnews-online.com

Dino D'Amore
By Dino D'Amore July 28, 2011 10:22
No Comments Yet!

Let me tell You a sad story ! There are no comments yet, but You can be first one to comment this article.

Write a comment

Only <a href="http://www.aviationnews-online.com/wp-login.php?redirect_to=http%3A%2F%2Fwww.aviationnews-online.com%2Feditorial-comment%2Fboeing-q2-profits-rise-mcnerney-defends-re-engine-decision%2F"> registered </a> users can comment.