The $15 billion jet dilemma facing Boeing’s CEO

NAMPA/REUTERS Boeing Co CEO Dave Calhoun faces a multibillion-dollar dilemma over how to rebuild sales in its core airliner business that has sparked an internal debate and put the future of the largest US exporter on the line, industry insiders say.Boeing is reeling from a safety scandal following crashes of its 737 MAX airliner and an air travel collapse caused by the Covid-19 pandemic. Those crises have overshadowed a deeper, longer term risk to the company's commercial passenger jet business.Boeing's share of the single-aisle jetliner market - where it competes in a global duopoly with Airbus - has faded from some 50% a decade ago to roughly 35% after the 737 MAX's lengthy grounding, according to Agency Partners and other analysts.Airbus' single-aisle A321neo has snapped up billions of dollars of orders in a recently booming segment of the market, as the largest MAX variants struggled to block it.Without a perfectly timed new addition to its portfolio, analysts warn America risks ceding to Europe a huge portion of that market - valued by plane-makers at some $3.5 trillion over 20 years.But Boeing is not yet ready to settle on a plan to develop a new plane to counter the A321neo, and two leading options - press ahead now or wait until later - come with financial and strategic risks, several people briefed on the discussions said."I'm confident that over a longer period of time, we'll get back to where we need to get to and I'm confident in the product line," Calhoun said in April as Boeing won new MAX orders.Asked about the company's discussions and options over a potential new airplane, a Boeing spokesman said it had no immediate comment beyond Calhoun's remarks to investors.OptionsA weakened Boeing has little margin for error, especially as it tackles industrial problems hobbling other airliners.Boeing's first option is to strike relatively quickly, bringing to market by around 2029 a 5 000-mile single-aisle jet with some 10% more fuel efficiency. That could potentially be launched for orders in 2023."There is no better way to fix their image than invest in the future now, pure and simple," Teal Group analyst Richard Aboulafia said.A new single-aisle jet would replace the out-of-production 757 and fill a void between the MAX and larger 787, confirming a twist to earlier mid-market plans as reported by Reuters in April last year. The idea took a backseat early in the pandemic, before regaining attention.It would also be an anchor for an eventual clean-sheet replacement of the 737 family.An alternative option is to wait for the next leap in engine technology, not expected until the early 2030s. That could involve open-rotor engines with visible blades using a mixture of traditional turbines and electric propulsion.Wary of letting short-term product decisions drive strategy, Boeing is also prioritising a deeper dive into investments or business changes needed to regain the number one spot, analysts say.Timing dilemmaBoth approaches carry risks. If it moves too quickly, Boeing may face a relatively straightforward counter-move.Airbus' preference is do nothing and preserve a favourable status quo, European sources say. But it has for years harboured studies codenamed ‘A321neo-plus-plus’ or ‘A321 Ultimate’ with more seats and composite wings to repel any commercial attack.Such an upgrade might cost Airbus some $2 to 3 billion, but far less than the $15 billion Boeing would spend on a new plane.For Boeing, a premature tit-for-tat move runs the risk of merely replicating the strategic spot it finds itself in now.If it moves too slowly, however, investors may have to bear a decade of perilously low market share in the single-aisle category, the industry's profit powerhouse.Those urging restraint, including soon-departing finance chief Greg Smith, have a simple argument, insiders say.Boeing has amassed a mountain of debt and burned $20 billion in cash lurching from crisis to crisis."It's a different world," one insider said. "How could you possibly be thinking about a new airplane?"However, some engineers at Boeing's Seattle commercial home are crying out for a bold move to reassert its engineering dominance following the worst period in its 105-year history."That should be a priority for Boeing right now," Tom McCarty, a veteran former Boeing avionics engineer, said. "To get back in clear leadership of advancing technology."

The $15 billion jet dilemma facing Boeing’s CEO

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Namibian Sun 2026-04-08

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The $15 billion jet dilemma facing Boeing’s CEO

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Namibian Sun 2026-04-08

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