United Airlines Boeing 757

Jet Buyers Want Boeing, Airbus to Focus on Current Planes

United Airlines Boeing 757

Some of the world’s largest jet buyers said Airbus and Boeing should focus on existing planes before developing an all-new aircraft to replace the U.S. company’s workhorse 757.

Replacing the discontinued 757, a jet used on transcontinental U.S. routes and trans-Atlantic flights, is one of the most-watched strategic issues facing Airbus Group NV and Boeing Co., who already have bulging order books for new and existing plane models.

“Both manufacturers have a lot to digest,” Steven Udvar-Házy, chief executive of Air Lease Corp., said at an industry conference here.

Air Lease has an order book of around 400 planes worth over $30 billion, and the industry veteran has a long track record of influencing new development programs at Boeing and Airbus.

Jeff Knittel, president of transportation and international finance at rival lessor CIT Group Inc., said that while there would be future demand for a new family of aircraft from Boeing, it didn’t need to rush out a new model.

“The question is when does it get filled and does it need to get filled immediately?” said Mr. Knittel. He said execution on existing programs is important: “Let’s get some of this done then refocus.”

A senior executive at United Continental Holdings Inc. said it has started evaluating potential replacements for its 757 fleet.

United still operates more than 90 Boeing 757s, and the potential replacement of a jet the U.S. aerospace firm stopped delivering in 2005 has been closely watched in airline and aerospace industry circles.

Ron Baur, United’s vice president of fleet, said the airline was looking at both the A321LR now being developed by Airbus and an all-new Boeing jet that the U.S. company is sketching out.

Mr. Baur told an industry conference that its evaluations are at the conceptual stage as its 757s are comparatively young, still flying regularly on extended routes across the Atlantic that don’t require a larger twin-aisle jetliner. The airline’s older workhorse 757s that are flying domestically are being quickly retired and replaced with new Boeing single-aisle jets.

“It would be great if Boeing and Airbus took a coffee break,” Aengus Kelly, chief executive of lessor AerCap Holdings NV said in an interview. The head of the largest jet lessor by fleet value called on plane makers to focus on completing and delivering the thousands of aircraft currently on order.

Leasing companies, which rent jets to airlines for anything from a few months to a decade or more, are traditionally cautious about new planes that might affect the pace of deliveries of orders or demand for their own existing fleets.

After multiyear delays developing new jetliners over the past decade, Mr. Udvar-Házy at Air Lease urged a focus on current commitments. He said this would afford plane makers more credibility when moving to the next all-new airplanes.

The comments potentially offer breathing room to Boeing, which is developing eight new versions of existing planes as part of a major overhaul of its commercial portfolio. Similarly, Airbus is ramping up production of its new long-range twin-aisle A350 XWB, and transitioning to an updated version of its single-aisle A320 range.

Airbus has opted to make incremental improvements on its biggest single-aisle jetliner, the 180 to 240-seat A321neo, boosting the jet’s range with new fuel tanks and an increasing in its carrying capacity. The move has spurred a renewed interest by Boeing to examine the medium to long-term demand of a midsize jet between its biggest single-aisle 737 and the long-range twin-aisle 787 Dreamliner.

Mr. Udvar-Házy said an all-new jet from Boeing is as much as eight to 12 years away, pushing any development to no earlier than 2023.

“I don’t really see either manufacturer spending $12-15 billion dollars rolling the dice on an all-new airplane at this point” he added. Increased risk aversion toward all-new projects, the availability of a new fuel-efficient engine and where the jet might be built will also guide and potentially slow Boeing’s decision, Mr. Udvar-Házy said.

More… http://www.nasdaq.com/article/jet-buyers-want-boeing-airbus-to-focus-on-current-planes-20150310-01213

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