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Boeing CEO Says Grounded Max Has Decades of Use Ahead

The company is reviewing “every dimension of design and certification” and has identified some changes.

Boeing CEO Says Grounded Max Has Decades of Use Ahead
The Boeing Co. logo sits on the side of a 737 Max aircraft during preparations ahead of the Farnborough International Airshow, U.K. (Photographer: Luke MacGregor/Bloomberg)

(Bloomberg) -- Boeing Co. Chief Executive Officer Dennis Muilenburg threw his support behind the beleaguered 737 Max aircraft with a prediction that the plane will reclaim its position as a single-aisle workhorse following upgrades on the model that’s been grounded since March.

Speaking on the first day of the Paris Air Show, the CEO reaffirmed his confidence that the Max will return to service before the end of the year and that the plane will remain the backbone of the company’s short-haul strategy for years to come. He dismissed the notion that two deadly Max crashes in a five-month span would force Boeing to accelerate the introduction of an all-new model as a replacement.

“The long-term, multi-decade strategy hasn’t changed,” Muilenburg said Monday in an interview with Bloomberg Television. Any new aircraft in the single-aisle space, the most common category in civil aviation, remains “a much more distant decision for the next couple decades,” he said.

Boeing is betting that it can win back support from customers and the flying public for the Max, the newest version of the world’s most widely used aircraft. The alternative -- a multi-billion-dollar investment in an all-new replacement -- would be a risky path both financially and technically because engineering advances probably won’t be sufficiently mature for another decade to justify such a huge investment.

“Boeing is possibly under the most pressure it has ever been, trying to rebuild trust and fighting for its reputation,” said Norbert Kretlow, an analyst at Commerzbank in Frankfurt. “I’ll eat my hat if Boeing doesn’t at least have a team up and running to do an assessment of their next narrow-body jet. But they cannot yet admit that.”

Prior to the crashes, both Boeing and Airbus SE had been expected to maintain their existing narrow-body fleets at least until the end of next decade. But the Max disasters spurred questions about whether Boeing would have to upend its plans as the accidents -- one in October and another in March, both killing everyone on board -- plunged the company into one of the deepest crises in its century-long history.

The company is reviewing “every dimension of design and certification” and has identified some changes, Muilenburg said, with the hope of getting the plane back into service before the end of the year.

“We are going deeper than normal, and we encourage that,” Muilenburg said.

Given there are more than 4,000 Max aircraft still in the order backlog, Boeing has no plan to accelerate the development of a successor, Muilenburg said, calling the Max a “very strong product line.”

At the same time, the company continues work on an all-new model that would sit between the single-aisle and wide-body aircraft, dubbed the New Mid-Market Airplane or NMA, with a plan for that model to begin service around 2025, Muilenburg said.

The NMA would help Boeing arrest a march by Airbus in a space that’s been left largely unoccupied since the U.S. planemaker stopped manufacturing the 757. Airbus used the first day of the air show to unveil its A321XLR, a variant of its best-selling model with extended range for longer trans-Atlantic routes.

Airbus won an early endorsement from Air Lease Corp., which ordered 27 A321XLR jets as part of a larger 100-plane contract valued at $11 billion before customary discounts.

The win was one of several for Toulouse, France-based Airbus on the inaugural day of the show, which is typically a stronghold for the European manufacturer because it plays out on the company’s home turf.

Boeing, by contrast, struck a more humble tone, saying orders aren’t a priority and that it’s in Paris with a focus on safety.

“We come to this air show with a tone of humility and learning,” Muilenburg said on the eve of the event.

--With assistance from Richard Weiss.

To contact the reporters on this story: Benedikt Kammel in Berlin at bkammel@bloomberg.net;Guy Johnson in Paris at gjohnson87@bloomberg.net;Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Benedikt Kammel, Brendan Case

©2019 Bloomberg L.P.