Boeing Pressured For Re-Engined 737

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Boeing is coming under increasing pressure to follow Airbus's lead and come up with a fuel-efficient version of its single-aisle airliner. A couple of weeks ago, Airbus announced it would offer a re-engined A320 equipped with either Pratt and Whitney's geared turbofan or GE's next-generation engines. Boeing has been hinting it will go for all-out replacement of the 737 with the new aircraft borrowing heavily from technology developed for the 787 Dreamliner, which has suffered numerous developmental setbacks. The earliest a new 737 could be ready is about 10 years from now and Boeing customers are worried that they'll lose ground to competitors flying the new A320s, which will be 15 percent more efficient and ready in 2016. Bombardier is also launching the state-of-the-art CSeries airliners in the next few years and claiming major efficiency advantages in the design. Boeing's biggest 737 customer isn't pulling any punches about its concerns.

Southwest Airlines CEO Gary Kelly told the company's annual meeting that fuel costs could challenge its low-fare model and he dropped a not-so-veiled threat. "We've already expressed that desire to Boeing to have more (fuel-efficient options)," Kelly is quoted by the Dallas Business Journal as saying. "If we're going to try to increase the fleet from this point forward, we'd like to do that ...." Southwest has 550 737s and recently agreed to buy larger 737-8s. Boeing insists it hasn't made up its mind on how to approach the single-aisle market and a major complication in re-engining is that the 737 sits so close to the ground that the larger-diameter inlets of the new engines would require taller landing gear.