Analyst thinks Boeing will back away from all-new 737

Seattle
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Buckingham Research, a boutique New York investment bank with a good track record of forecasting Boeing moves, has issued a note in which it says the Seattle airframer is moving away from unveiling an all-new 737 replacement.

With the relative success of Airbus's re-engined A320neo, Boeing has been forced to decide whether to follow suit and re-engine the 737 or to develop an entirely new aircraft.

The company had indicated that it would reveal its decision by the Paris air show in July, with rumours suggesting that it was leaning towards a clean-sheet replacement.

However, Buckingham writes: "Our view has been that Boeing will develop a new airplane and not re-engine the 737. Further, both consensus and our expectations anticipate Boeing will announce a new 737/757-sized airplane at the Paris air show in June.

"We're changing that view and do not believe it will announce a new airplane at the show. We think Boeing may not gain an 'approval to offer' for a new airplane until late 2012/early 2013.

"With the potential for meaningfully lower R&D spend through 2014 as 787 R&D declines, we think that's very bullish for [Boeing]."

Buckingham now does not expect any "new airplane" announcement at the Paris air show.