More than a decade ago, Boeing executives made a critical decision: To keep up with the company's main rival, Airbus, they abandoned the idea of developing new aircraft and instead raced to update the company's most popular plane, the 737.
That effort The birth of the 737 MaxBoeing has had two fatal crashes in 2018 and 2019, and in January this year, a panel exploded in flight on one of its planes, further raising concerns. Boeing once dominated the global market for single-aisle jets, but the aircraft's failure caused it to fall behind Airbus.
Now Boeing, which is expected to name a new chief executive by the end of the year, must make another key choice: When to develop the next generation of an all-new aircraft?
If the company missteps, it could lose billions of dollars and still lose market share to Toulouse, France-based Airbus. Both manufacturers also face a distant but growing threat from China and increasing pressure to cut planet-warming emissions.
“Whoever takes over as CEO will make one of the most important decisions,” said Ken Herbert, aerospace and defense analyst at RBC Capital Markets. “Their legacy will be defined by what they do with the portfolio.”
Boeing declined to comment.
Commercial aircraft are generally divided into two categories. Narrow-body or single-aisle aircraft, such as the 737, typically carry 100 to 200 passengers on domestic flights within the United States. Wide-body or twin-aisle aircraft can carry more passengers to farther destinations, such as from New York to London or Tokyo.
Boeing and Airbus sell more narrow-body jets, but airlines are increasingly demanding larger planes because of limited gate and runway capacity at many airports and growing travel demand.
The Max was designed to compete with Airbus’ A320neo family of planes. Experts say the outcome of that competition is clear: Boeing lost. Airlines around the world have ordered more Airbus planes, especially the largest A321neo. The European company’s lead has been cemented after the Max crashes, which experts blamed on poor design and engineering decisions, and the subsequent 20-month global ban on the plane.
In 2019, Airbus flew more passenger jets worldwide than Boeing for the first time, according to aviation data provider Cirium.
The Max remains popular, especially with U.S. airlines, which have long flown Boeing planes. The company is struggling to meet orders for about 4,300 Maxes, with a backlog worth hundreds of billions of dollars. But Airbus's A320neo family is far more popular, with more than 7,100 unfilled orders for the plane's three models.
Boeing still leads in large twin-aisle jets, but Airbus's dominance in the lucrative single-aisle market could become self-reinforcing, experts say. With more sales, Airbus can invest more in research and development. And as its planes fly more, Airbus can make more money selling spare parts and providing services.
“Boeing has been busy putting out fires, while Airbus has been running its business,” said Ron Epstein, aerospace and defense analyst at Bank of America.
Boeing also has refined the 737, which it introduced in the late 1960s, to its limits in developing the Max, and aviation experts say the company's next plane will likely be built from scratch.
It is not yet clear what the new aircraft will look like or when it will arrive.
Boeing CEO Dave Calhoun has said the company won’t launch a new plane until the mid-2030s, in part because such an effort would only be worthwhile if more efficient engines were available from companies like General Electric, Rolls-Royce and Pratt & Whitney.
But some experts say building the new plane could help Boeing fill an important niche in the market for larger narrow-body aircraft.
Airbus’ most popular plane so far is the A321neo, which has the most seats and the longest range of its three neo models. Boeing’s 737 Max 10 doesn’t have as far a range and has yet to receive regulatory approval.
Bank of America's Epstein estimated last year that Boeing could sell 6,500 large single-aisle jets to airlines, mostly to replace smaller narrow-body planes. He said at the time that the jets would take seven to eight years to develop and cost $20 billion to develop, with Boeing making at least five times that amount in gross profit.
Some aviation experts also believe Boeing and Calhoun are being too cautious about developing new planes, saying they could be more efficient even without waiting for new engines. They say new materials, different types of wings and other advances could help Boeing achieve meaningful improvements.
“If you offer an airline a reasonably good aircraft, they will take it,” said Michel Merluzeau, an analyst at AIR. An aerospace and defense consulting firm.
Some say the longer Boeing takes to build new planes, the longer Airbus will have to extend its lead. While the new engines promise big efficiency gains, they may not live up to expectations in practice. Airlines may also be slow to buy planes with them, especially after problems with the current generation of engines, which have required more frequent and longer repairs than expected.
But others say Boeing might be wise to wait. If it moves too quickly, Airbus could come up with a newer, better plane.
Most analysts expect Airbus to launch a new plane by the middle of the next decade, about the same time as Mr. Calhoun is targeting. Aviation experts are divided on whether Airbus should move first or wait to follow Boeing, but say the European manufacturer is well-positioned either way.
Developing a new aircraft is a difficult task. Unlike wide-body aircraft, narrow-body aircraft are sold in larger quantities and therefore need to be produced quickly; Boeing and Airbus aim to produce dozens per month. To accommodate this pace, Boeing must develop a complex production system and prepare its suppliers. Airlines may also have to be willing to train pilots for the new aircraft, an expensive and time-consuming process.
Ultimately, any new aircraft must last for decades, Calhoun said in an interview. Last year, industry publication Aviation Week.
“Twenty years is a disaster; thirty years is also a disaster,” he said. “They have to hold out for fifty years.”
Boeing, of course, isn’t starting from scratch. The company and Airbus are constantly developing and launching new technologies, processes and tools. Boeing could draw on experience elsewhere, for example, from developing the wide-body 787 Dreamliner, which was first delivered to an airline in 2011, or the upcoming 777X, a more efficient version of an existing wide-body Boeing aircraft, which will make its own wings using composite materials.
The company is also working on experimental technologies. Working with NASA, Boeing has developed a longer, thinner wing supported by struts, a design known as a transonic truss-braced wing. The company also has a research program called EcoDemonstrators that uses modified aircraft to test new technologies. Boeing and Airbus are also separately experimenting with using sustainable fuels that can be made from waste cooking oil, garbage, corn and other materials.
Aviation experts say building new planes could bring new enthusiasm to the company after its recent problems.
“If they can make it easier for people to like them, I think they’ll find that there’s a lot of support for the new and improved Boeing,” said Rob Stallard, an analyst at Vertical Research Partners who covers Boeing and Airbus.
