Airbus Dismisses Boeing 737-8ERX Plan
When Airbus announced its long-range version of its single-aisle jet, the A321LR, the rival Boeing claimed the market for the plane was too small.
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When Airbus announced its long-range version of its single-aisle jet, the A321LR, the company’s chief rival claimed the market for the plane was too small. Boeing Co. (NYSE: BA) may have change its tune, though, as it was reported that the company was talking with potential customers about a competitive airplane dubbed the 737-8ERX.
The war of words — never entirely cool between the two giants — may heat up again with the report Tuesday at Leeham News & Comment that Airbus’s chief operating officer-customers, has unloaded on the Boeing plan. Leeham quotes John Leahy:
Boeing is getting more and more desperate. Boeing is talking the “sweet spot.” They only have one airplane. There isn’t that much of a market at the bottom of the market. I know they are playing around with how do they answer the A321LR. Their answer is focusing on range. There’s no place for bags [in the 737-8ERX], you’re a flying fuel tank. We had to play around quite a bit [to put bags in the A321LR]. If that’s the best they can do, they have a serious problem on their hands.
The other implication of Leahy’s statement is that Boeing’s entry at the “bottom of the market” — the 737-7 — is not selling well, and the larger 737-9 may be having sales woes as well. So Boeing has to declare victory by claiming that the 737-8 is the “sweet spot.”
Leahy also dismissed a “middle of the market” Boeing concept to produce a small, twin-aisle airplane to seat 225 to 250 passengers with a range of around 5,000 miles, calling the company the “Boeing Paper Airplane Company.”
Boeing’s stock traded at $152.87 shortly after the opening bell Tuesday morning, down about 0.5%. The 52-week range is $116.32 to $158.83.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
