Boeing decision on 737 future likely this year

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A key decision on whether to upgrade or replace the biggest selling aircraft of all time, the B737, will likely come this year, US giant Boeing said Sunday as rival Airbus wins even more orders for its A320.

Jim Albaugh, head of Boeing's commercial aircraft business, said the company was "taking a very disciplined approach to this," adding that a decision would come "probably, probably, by the end of the year."

Great rivals Boeing and Airbus are locked in a high-stakes battle for the medium-haul market, the most important single segment of the industry and where the European giant has stolen a march with its upgraded A320neo.

Last week, Airbus won two orders for more than 100 A320neos, which it says is 15 percent more cost efficient, from low-cost carriers GoAir of India and Cebu Airlines of the Philippines worth some $10 billion at list prices.

Such orders, and with more to come, "are no surprise to us," Albaugh told a briefing ahead of the Paris International Airshow which opens Monday at Le Bourget in the northern Paris suburbs.

He said he expected more announcements at the show but insisted the B737 was more than a match for the A320 series and could be upgraded further to deliver significant efficiency gains or replaced with a new aircraft.

Either way, Boeing would remain competitive, he said, noting that what counted was not how many planes were sold -- as in Airbus' case -- but whether they were sold profitably, that the business worked.

Albaugh noted that Boeing recently announced it was increasing monthly B737 output to 42 from 31.5 aircraft per month as it seeks to manage "demand ... we can't satisfy, quite frankly."

Airbus launched the single-aisle A320 'New Engine Option' in December, with the plane due in service from 2015. A new plane to replace the B737, besides requiring a huge investment, might only become available in 2020.

Boeing expects 33,500 planes worth $4.0 trillion (2.8 trillion euros) to be needed over the next 20 years but with single-aisle aircraft like the B737 or A320 accounting for fully 70 percent by number and 48 percent by value.

© 2011 AFP

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