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Report: Boeing Begins Early Work on New Plane Design

By Lou Whiteman – Oct 21, 2020 at 2:40PM

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The single-aisle plane would slot in between the 737 and 787 models.

Boeing (BA 0.02%) is reportedly talking to potential customers and suppliers about a new commercial aircraft design, pushing forward with the long-discussed move even as the 737 MAX grounding and coronavirus pandemic continue to weigh on its business.

The aerospace company has had on-and-off discussions for years about replacing its 767 and filling a gap in its portfolio between the 737 and the larger, international-focused 787 Dreamliner. Boeing at one time had been exploring what it called the NMA, short for "new midmarket airplane," but dropped that push after the March 2019 grounding of the MAX because of two fatal crashes.

A Boeing 737-900 in flight.

The new plane would be larger than Boeing's 737. Image source: Boeing.

The MAX is nearing recertification, and Boeing is apparently beginning to think about what comes next. The Wall Street Journal reported Wednesday that the company has held preliminary discussions with various parties about a new single-aisle aircraft with efficient engines able to carry between 200 and 250 passengers.

The discussions come as the pandemic has crimped demand for air travel and brought international travel largely to a standstill. As airlines slowly recover, they are expected to focus primarily on smaller, single-aisle planes like the MAX, and this new plane could slot in well for domestic and international routes that don't need the full capacity of a larger 787 or 777 double-aisle jet.

Archrival Airbus (EADSY 0.12%) has enjoyed strong demand for the larger variants of its A320 family, the MAX's primary competition. The A321 LR and XLR models, two of the biggest in the family, have more than 3,000 in combined orders.

The talks are in their early stages, and as the NMA showed before, nothing concrete could come of them. But Boeing needs to move quickly if it wants to take advantage of market trends. It would take years for a new plane to move through the design phase and into production, and because of the issues exposed during the 737 MAX investigation, Boeing will likely face intense scrutiny on any new plane design.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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