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Boeing Blog

Seattle Times aerospace reporter Dominic Gates covers top industry events to bring you the latest news, highlighting how it impacts Boeing and its competitors.

July 13, 2014 at 12:58 PM

Farnborough 2014: Boeing chief talks A330neo, Ex-Im Bank and a new MAX

On the eve of the Farnborough Air Show in London, Boeing Commercial Airplanes chief Ray Conner announced a new high-density version of the forthcoming 737 MAX family, something long requested by leading 737 customer Ryanair.

He also talked down the threat from the expected announcement by Airbus Monday that it will launch an update of its A330 mid-size twinjet with new fuel-efficient engines.

And Conner flatly rejected any compromise in the current political controversy over the U.S. Export-Import Bank.

At a media roundtable at the company’s headquarters in central London, Conner said the company will launch a 200-seat, all-economy version of the 737 MAX8, aimed at low-cost carriers.

To make possible an extra 11 seats beyond the standard 189, Boeing will add an extra exit door just aft of the wing, the same one on the larger 737 MAX9. That’s needed to comply with safety regulations, to ensure that 200 people could exit quickly in an emergency.

Conner said the 11 extra fares on each flight, and extra revenue, would improve the operating cost of the airplane by 5 percent, making it 20 percent better than the current 737NG model.

The extra weight carried would reduce efficiency by just 1 percent each trip, he said.

The move seems to be a counter to Airbus studies aimed at finding a way to increase the seat capacity of the rival A320neo to match the original MAX seating of 189 passengers.

Scott Hamilton, industry analyst with Leeham.net, said Ryanair chief executive Michael O’Leary will almost certainly order the new model, though he would put in 199 seats rather than 200, because each 50 seats requires an additional flight attendant.

Conner confirmed that Ryanair is indeed a likely candidate to buy the jet. “Michael and I have talked about this since I’ve been in this job,” he said.

The new model would have seats measuring just 29 inches from seatback to seatback. The standard today is typically 30 to 31 inches.

Conner was unclear what this new model would be called, but seemed to settle on 737-8 MAX.

Airbus A330neo

Turning to the expected launch Monday by Airbus of the A330neo, featuring new Rolls-Royce engines derived from the Rolls engines for the 787 Dreamliner, Conner claimed to be unworried by the competitive threat the new plane might pose to the 787.

He said the A330 is 20,000 pounds heavier than Boeing’s plane and that the 787-10 variant is almost 30 percent better in fuel efficiency on a per seat basis than an A330-300 today.

“A new engine isn’t going to get you there,” Conner said. “I like our product line a lot. We’re more efficient.”

Export-Import Bank

Conner was most animated when the subject of the U.S. Export-Import Bank came up for discussion.

“For us to not have the Ex-Im Bank would put us at a disadvantage in the marketplace and could impact a lot of jobs across the U.S.,” Conner said.

Current authorization for Ex-Im — which promotes U.S. exports by providing loans or loan guarantees to foreign companies so they can purchase U.S. goods — is set to expire in September. Congressional Republicans have been balking at reauthorizing.

Last year, the bank provided $8 billion worth of loans or loan guarantees to Boeing customers.

Delta Air Lines has been a vocal opponent of the Ex-Im Bank, objecting to U.S. taxpayer money subsidizing rivals such as Air India or Emirates when buying Boeing jets.

That’s led some to suggest a compromise: that the Bank not be allowed to finance big widebody jets that fly international routes, only domestic single-aisle jets. But Conner roundly rejected that option.

He said that if, for example, Korean Air were choosing between Airbus A380s and Boeing 777X, and could get European export credit agency support, but no such financing from the U.S., then it would likely go with Airbus and could then use those jets to fly into the U.S.  — and still compete against Delta and other U.S. carriers.

 “So it’s not going to protect the U.S. airlines,” Conner concluded. “Any form of elimination of Ex-Im would be unacceptable to us. That’s not a compromise.”

He said he believes a political coalition of business interests in Washington D.C. can save the Bank.

” I think we have solid support,” Conner said. “I’m optimistic.”

That coalition certainly includes Gov. Jay Inslee. In a separate interview at the Washington state reception here Sunday, Inslee said many smaller Washington manufacturers would suffer as well as Boeing if Congress doesn’t renew the Ex-Im Bank’s authorization.

He blamed the Tea Party’s “ideological obsession” with reducing the size and power of the federal government for the impasse in Washington, D.C.

“That group now dominates the U.S. House of Representatives,” said Inslee. “That excessive worship at the altar of ideology rather than trying to compete for jobs is what is causing the problem.”

Comments | Topics: 737 MAX, A330neo, Airbus

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