In September, investors' eyes turn toward Tokyo, in hopes of glimpsing the first arrival of Boeing's
Dubbed the "737 MAX," Boeing's latest 737 variant packs LEAP-1B engines designed by a General Electric
Depending on who's talking, and what they're comparing it to, Boeing's reengined 737 could be 7% more fuel efficient than "the competition," 16% better than Airbus's current A320, and 4% better than the A320neo. (That's according to Boeing. Airbus still says the A320neo is more efficient.)
For now, all of this is just speculation. Airbus doesn't have any A320neos yet, and it won't till 2015. General Electric hasn't even built the new MAX engine, and we won't see how it improves performance on the 737 until the plane is ready in 2017.
The magic number: 2017
You'll notice that Boeing has given itself a big time-window in which to redesign its new single-aisle flagship. (Maybe, it'll even meet this deadline.) And there's another reason for Boeing to push out the MAX six years: Its backlog. Boeing already has 737 orders stacked up seven years high, awaiting fulfillment. It will take time to build all those planes.
You might think this would pose a problem -- if Boeing has the MAX ready for prime time in 2017, can it still foist obsolete "old" 737s on customers who ordered them for 2017 and 2018 delivery? But I don't think this is a problem at all.
Some of Boeing's "old" 737 orders have already been converted to requests for the 737 MAX. While Southwest
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Fool contributor Rich Smith owns shares of Southwest. Also, Motley Fool newsletter services have recommended buying shares of Southwest Airlines. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.