Innovation | Boeing ‘paper plane’ wins over a skeptic as United takes a peek

United Continental Holdings Inc. has taken a close look at an all-new jetliner that Boeing Co. engineers are developing for trans-Atlantic flying, and the airline likes what it sees.

“What we’ve seen so far is very, very interesting to us,” Andrew Levy, United’s chief financial officer, said in an interview Tuesday. “We certainly hope Boeing launches the airplane. We think there is a need for it.”

An endorsement from United, a large Boeing customer, would go a long way toward making the business case for so-called middle-of-market jetliners. While the airplane concept exists only on paper so far, Boeing has honed the design to seat between 225 and 260 passengers and worked to bring production costs in line with prices that airlines would be willing to pay.

“I wouldn’t be surprised if there is a decision to offer by this year,” John Plueger, chief executive officer and co-founder of Air Lease Corp., said of the first step in Boeing’s process to formally introduce a new plane. “That might be a bit early, a bit aggressive. But that would not surprise me.”

United had been among the skeptics of the jets that Boeing has spent years developing to fill the gap in its product line-up between the largest of the narrow-body 737 models and the smallest 787 Dreamliners. As Boeing is designing a twin-aisle aircraft with the range to fly from London to New York, budget carriers are shifting more mid-range flying to relatively inexpensive narrow-body jets such as Airbus Group SE’s A321neo.

After delving deeper into the Boeing design, “we’re convinced, we get it. We understand the economics,” Levy said in an interview at the ISTAT annual conference in San Diego. “We thought a twin made no sense, but we walked through it and had our questions answered. From what we’ve seen, we like it. But it’s a paper airplane. Hopefully they’ll launch it.”

Timing and price are two of the critical elements that Boeing must consider in its high-stakes chess match with Airbus for market dominance. Billions of dollars of investment are at stake, and the payoff can be thwarted by factors ranging from cheap oil to supplier stumbles. Boeing has been planning its new family of mid-range aircraft, while Airbus has been marketing upgrades of existing jetliners: the A321, its largest narrow-body, and A330 wide-body jets.

Boeing’s jet, which would probably be known as the 797, may begin flying in 2025, said Steven Udvar- Hazy, who co-founded Air Lease and is influential in shaping product strategy for Boeing and Airbus. The engine technology and break-through design of the new aircraft will be critical since it may fly through 2060, he said. Bloomberg