Boeing on brink of 7E7 commitment

Boeing on brink of 7E7 commitment

Boeing chairman Phil Condit’s optimistic words about the proposed 7E7 jetliner have quashed lingering doubts about the aircraft maker’s commitment to its first all-new jet in over a decade, analysts said.

“It’s looking a lot firmer now,” said Teal Group aerospace analyst Richard Aboulafia. “Given the strength of the recent signals, I think backing out now would be a disaster for Boeing.”

Designed to cut airline fuel costs by 20 percent over current mid-sized jets, the 7E7 would replace the slow-selling narrow-body 757, which Boeing is shutting down, and the wide-body 767, which survives largely because of a $22.4 billion U.S. Air Force order for 100 air refueling tankers.

The 7E7 would compete with Airbus’ A330. Airbus discounts Boeing’s 7E7 efficiency promises, saying its proposed 10-percent operating cost savings are closer to 5 percent versus the A330, which could be negated with lower purchase prices or by using the new, fuel-sipping 7E7 engines on A330s.

Much of the 7E7’s fuel savings will come from the new engines, but technical advances could make it difficult for Airbus to incorporate the new powerplants into the A330 without costly modifications, analysts say.

Boeing could also try to lock up all three engine manufacturers through joint ventures and exclusive contracts.