For more than a decade, aircraft development has been pointed towards long-range widebody aircraft - the Airbus A380 and A350 and the Boeing 787 and 777 - but attention shifted to the narrowbody market with the launch of the Airbus A320neo. Boeing must now decide how to chart a way forward faced with competition from Brazil, Canada, China and Europe, including Russia.
Boeing's difficult choice comes down to two options: re-engine the Next Generation 737 family or build an all-new aircraft. Although the new jet's attributes have yet to be determined as, indeed, has its launch, its configuration is likely to match the familiar tube and wing that defines commercial air transport today - and only one jet would be launched, despite Boeing having shopped round two seating arrangements.
Earlier this month lessor Internatiional Lease Finance placed a $2.6 billion firm order for 32 Boeing Next Generation 737s
Boeing has been quietly polling the world's most influential airlines, offering them a veritable "grab-bag" of technologies, industry officials say. The goal is to identify carriers' demands of a new jet that would enter revenue service in 2019 or 2020. A decision is to be announced by the time of the Paris air show in June.
Mike Bair, Boeing vice-president of advanced 737 product development, says what the market does not appear to want is a re-engined 737 that merely matches the performance of the A320neo.
"I kind of characterise it as more underwhelmed than overwhelmed and almost all of them want to know what more we can do with a new airplane," he says.
ART OF THE POSSIBLE
Bair, who has been in his current role since January 2010, says Boeing's focus is to "figure out the art of the possible" for a jet that could have 180-250 seats, occupying a spot below the 220- to 250-seat, long-range 787-8.
"I try not to say 737 replacement, because what we're trying to understand is what does the world need in 2030?" Bair says.
"China is a good example. There's a good reason a larger airplane might make a lot of sense. A small city in China is three million people, which is a big city everywhere else."
Boeing has floated two ideas for the cross-section: a six-abreast single-aisle and a seven-abreast twin-aisle with a container-sized lower cargo hold smaller than the 767's, dubbed the "new light twin".
"As the size requirements are moving up, at some point a second aisle makes sense, as the airplane gets bigger and you also have to think about not just the first airplane but the stretch," Bair says. "I'd like to say we probably wouldn't intentionally inflict the 757-300 on the world today, so an airplane at that size needs two aisles to effectively unload and load."
However, Bair rules out two aircraft families making it off the drawing board, eliminating a repeat of the concurrent development of the all-new 757 and 767 in the early 1980s.
"We won't do two cross-sections, it will be one," he says. "Obviously the wider the cross-section, it's not free - you lose efficiency for making the airplane wider and we need to understand how much the airlines are willing to spend, basically, on a wider airplane."
However, Boeing Commercial Airplanes chief Jim Albaugh says: "I think it's doubtful that the new light twin is the answer, but we've got a lot of configurations, a lot of airplanes in the trade space."
Analysis is being conducted on the roughly three-dozen 737s delivered with the Boeing Sky Interior. This new design allows passengers to load and unload the overhead bins without having to step into the aisle, says Bair, who adds that the airframer is "watching carefully" to see if this ergonomic change can improve aircraft turn time without the need for adding a wider, or even a second, aisle and a seventh seat.
Boeing is also looking at moving to a containerised cargo system to speed loading and unloading to maximise utilisation.
"The world's equivalent of [occupational health and safety] rules aren't getting any easier," says Bair. "And bulk loading lower holds is really hard on people," he adds.
Bair says his team has ruled out radical configurations such as a blended wing body, with its lack of windows and wide cross-section, or an unducted fan engine, which makes it "hard to even conjure up a solution on what to do with blade-out".
The risk of losing a blade, Bair adds, is low enough that it is acceptable but "every time a blade comes off a propeller airplane, the airplane is lost, and we just won't do that".
He says: "These are going to be conventional-looking engines and they're going to be conventional-looking airplanes. Tube and wing has been around for a long time for lots of really good reasons. It's a very, very efficient way to fly stuff around, especially people."
Material selection decisions remain "up in the air", with an all-composite, all-metallic or a hybrid of the two being evaluated. Boeing selected a majority-composite design for the 787, with the wing and fuselage made of carbonfibre. "Since we picked the materials set on the 787, the aluminium folks did not go to sleep," Bair notes, "so there are more choices now."
One thing Bair considers "overblown" is the impact of ramp rash - or accidental impacts from ground handling - on a composite airframe.
"People's initial reaction to composites were based on their experience with things like flaps and composite movable edges, which are honeycomb laminates - they're delicate, they can get damaged and they're difficult to repair," he says. "The built-up laminates that we've done on the 787 are actually harder to damage than aluminium, and we have dropped stuff on these things more often than you can imagine. In some ways, they're easier to repair than aluminium."
Yet all the skin thicknesses on the 787 are sized to absorb an impact, either by hail or baggage carts, "which means if that's how thick it has to be on a big airplane, it needs to be that thick on a little airplane. So there's sort of diminishing returns in terms of efficiency," Bair says.
Once the question of what the market wants is answered and materials selected, Boeing must get under the skin and on to the wing of its new aircraft to define what technologies can meet the performance the market demands. However, the airframer's desire to deliver a high-technology aircraft is tempered by its experience on pushing technology too far, Albaugh says.
"I think the question is to limit the technologies. I don't want this airplane to be the son of 787, we have to make sure we de-risk whatever we build," he adds.
Among items on the table are an advanced bleed architecture pneumatic system, a fly-by-light flight control system, laminar flow aerodynamics, adaptive wings and the latest developments from three major engine makers, only two of which are likely be offered on a new jet.
How can Boeing deliver 10% improved cash operating costs and a 20% improvement in fuel burn over the 737NG? On short- to medium-haul missions, fuel tends to account for only 25% of cash operating costs, versus 50% on a long-range mission.
With a narrowbody, Boeing would seek to avoid the 787 programme's pitfalls
Boeing is working closely with CFM International, Pratt & Whitney and Rolls-Royce to identify engine options for a new jet. "All three of them have given us what they think they can do for an engine that comes into service in [2019 or 2020]," Bair says.
Albaugh says the engines on a new aircraft would be 4-5% more efficient than those being offered on the A320neo and Bombardier CS300 at the decade's midpoint.
It is Boeing's preference to move away from the exclusivity agreements arranged with CFM on the 737NG and provide a choice of two engines on the new aircraft. One industry official believes a spot is likely to be reserved for the CFM Leap-X, while competition for the second slot will involve the Pratt & Whitney PW1000G geared turbofan and Rolls-Royce's Advance2 and Advance3 engines.
Aside from fuel-burn improvements, "we have opportunities on all fronts" to improve the maintenance cost of the aircraft by driving up reliability and asset utilisation through cross-section and material choices, Bair says.
The jet's speed and range, meanwhile, will be defined by existing air traffic systems and transcontinental route structures. Bair says a cruise speed of Mach 0.79 or M0.80 - the same as today's 737 - would serve as a foundation. "You really honk up air traffic control if you throw an either vastly faster or vastly slower airplane in those systems," he says.
Range is "a little less of a mystery for us", he adds. "[Transcontinental] is a pretty good capability for this size of airplane. I keep telling everyone that we say transcon, and that sounds very US-centric, but almost every continent in the world is about the same size, so what works here, kinda works everywhere else, with the exception of Europe, which is smaller," he adds.
Based on Bair's assessment, transcontinental could place the range of the new jets anywhere from 2,700nm (5,000km) to 3,500nm, in line with, and potentially slightly longer than, the range of today's 737s.
Boeing is beginning to evaluate new technologies for the systems architectures. These could include the first commercial implementation of a fly-by-light flight-control system, in which copper signal wiring is replaced with fibre-optic cable for increased data transmission.
Gulfstream Aerospace flight-tested fly-by-light controls during two flights in March and September 2008 on a GV business jet equipped with spoilers actuated with signals solely from fibre-optic transmission with only four fibre-optic wires.
Questions of scalability extend beyond the 787's material selection as Boeing works to determine if its more-electric architecture can be adapted to a smaller new aircraft.
Industry officials confirm Boeing is examining an advanced pneumatic bleed air system as the 787's electrical architecture.
"The whole more-electric architecture takes more room inside the airplane," says Bair, although it "takes less room around the pylon".
Because it is smaller, the new jet will offer less room for items such as electric motor controllers and motor-powered air condition packs, so the electrical system will either be all-pneumatic, all-electric or a combination of both.
According to a public Boeing/Federal Aviation Administration presentation, the airframer plans to flight-test adaptive trailing edge technology on its 737 "ecoDemonstrator" as early as August or September 2012, as part of the FAA's Continuous Lower Energy Emissions and Noise (Cleen) programme. The goal is to evaluate whether "tailoring wing performance" can "reduce noise and fuel burn at different flight regimes".
Additionally, Boeing will use a 777 or 787 to flight-test a ceramic matrix composite exhaust nozzle in August/September 2013, to determine whether this reduces engine noise and enables hotter, more efficient engines.
Bair was one of the chief architects of the original 787 business plan, which horizontally integrated supply partners, shifting design and manufacturing responsibility away from Boeing. It is a model that has served up an excruciating lesson for the airframer via years of delays and billions of dollars of cost overruns.
"I have a lot of scars so I know what not to do this time around," says Bair, who was replaced as programme chief in October 2007 by Pat Shanahan, now vice-president of airplane programmes.
Bair cites the importance of making the overall programme schedule less aggressive and "adjusting the partner model". He says of the of 787's partner model: "There's a lot of instances where it worked the way we wanted it to, but too many where it didn't".
As the new jet would be smaller and have fewer structural joins, Boeing is likely to have fewer structural suppliers. Bair says having the suppliers close has "a lot of merit". Such a "super-site" model is at the other end of the spectrum to a globally distributed supply chain.
Bair says the new jet would have to meet at least the 737 rates Boeing plans in 2013 - 38 a month. Using the 787 as a guide, he notes the importance of composite fibre laydown rates and asserts: "We're better now than we were at the front end of the 787 and [have] lots of ideas to get better."
If metallics, rather than composites, were to dominate in material selection, Boeing could decide to redeploy the infrastructure used to build 737NG twinjets.
The amount of manufacturing Boeing keeps in-house is a central question, one that also defined the 787's early development via a metric called RONA (return on net assets), which weighs commercial success against directly owned infrastructure. "Yes and no," says Bair when asked if RONA would guide the new jet's development. "We were way too focused on not having assets on the 787, and having the right level of assets is the right way to run a business. We will be less focused, I would say, on RONA than we were on the front end of the 787."
Today's 737 is an exemplar of an incrementally evolved product. It has changed from the cigar engine pods under the wings of original models to high-bypass CFM engines on the classic -300, -400 and -500 and then to the Next Generation's new wing, engine and avionics.
Meanwhile, the production rate accelerated from 21 aircraft a month in 1997 to 31.5 a month today, with a lean moving line towards a target of 38 a month by 2013. Boeing has committed to "continually improving" its product line with the CFM56-7BE engine, Sky Interior and exterior drag clean-up.
What comes next to extend the product's life may provide the technological and industrial bridge to the new jet. Bair says incremental changes, as well as big leaps, are central to Boeing's approach to developing new aircraft.
However, despite a host of potential 737 improvements, the market appears to be pushing Boeing towards an expensive all-new aircraft.
Reflecting on 737 history, Bair says Boeing "artificially truncated" the 737 Classic line after needing mechanics to transition to building the 737NG models. "We could have sold a lot more  Classics during that overlap. There's no reason why that phenomenon won't occur this time and probably even more likely that it's going to occur [with production running for 15-20 more years on the 737NG]."
With 2,100 unfilled orders, the size of the 737 installed base at the end of this decade is going to be "enormous", Bair says. He expects airlines to say: "I just need another 20 or 30 or 40 [737s]", and that "there's going to be a very long overlap" with a new jet. While the strategy development of an all-new jet is not "strategically tied" to today's 737, what comes next - covering or sitting just above the 737 segment - "could be complementary and they could live side-by-side for a long time", Bair predicts.