Boeing should replace 777 not 737: Analyst

Boeing’s top priority should be replacing its 777 widebody jet, not the 737 narrowbody, according to J.P. Morgan analyst Joseph Nadol who warned that Airbus’s new A350XWB widebody family, which is scheduled to enter service in 2015, already is eating into 777 sales. Nadol notes that 777 backlog peaked more than two years ago and […]


737 777 A350XWB Airbus Boeing


Boeing’s top priority should be replacing its 777 widebody jet, not the 737 narrowbody, according to J.P. Morgan analyst Joseph Nadol who warned that Airbus’s new A350XWB widebody family, which is scheduled to enter service in 2015, already is eating into 777 sales. Nadol notes that 777 backlog peaked more than two years ago and now totals just 3.2 years’ worth of production, compared with nearly five years’ worth of production in the 737 backlog. “Boeing still needs an answer to the A350XWB,” Nadol wrote in a 7 July note to his clients. Industry attention has focused on what Boeing will do with the 737 if Airbus moves, as expected, to re-engine its A320 narrowbody jet. Nadol says speculation about the 737, which has intensified in the run-up to this month’s Farnborough Air Show, has overshadowed the urgent need for Boeing to respond to the A350. Two of the A350 models — the -900 and -1000 — are aimed directly at the 777. While orders for the newer 777-300ER have held up reasonably well, the backlog for the 777-200, the aircraft’s oldest and smallest model, has declined to just 35 aircraft from 90 in mid-2006. “The 737 backlog does not look that vulnerable,” Nadol says. “The 777 backlog does.” Boeing’s longstanding position has been that it wants more time to study the performance of the A350 family before responding. The company has been studying a range of responses and believes it still has ample time to react.