Boeing Supplier Says New Jet May Hinge on Success of Max Return

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Boeing Co.’s decision on whether to launch a new, midrange jetliner is likely to hinge on the success of the 737 Max as it returns to service, according to one of the grounded jet’s engine suppliers.

How sales of the Boeing narrow-body plane fare against Airbus SE models will be key to the U.S. planemaker’s new-product strategy, Philippe Petitcolin, chief executive officer of French engine-maker Safran SA, said Friday. A decision is probably two to three years away, he said.

“If Boeing’s market share falls to a third, then it might decide to launch a project in 2022 or 2023,” Petitcolin said on a call after reporting third-quarter sales. He added that while the move is possible, it’s “not the most probable.”

LEAP engines made by a partnership of Safran and General Electric Co. are the only option on the 737 Max and one of two turbine choices for the its main competitor, the Airbus A320neo family.

Before the 737 Max was grounded in March 2019 following two deadly accidents, Airbus had an edge in the market. The gap has now widened, with several hundred Boeing Max cancellations since the start of the Covid-19 pandemic.

The 737 Max is expected to win regulatory approval to fly again within weeks. American Airlines Group Inc. has scheduled the jet’s return on the busy Miami-New York corridor around year-end.

Boeing has reached out to Rolls-Royce Holdings Plc to gauge the British engine manufacturer’s interest in a potential new aircraft, Bloomberg News has reported. The midsize jet would fill a gap in the U.S. company’s product lineup and blunt the success of Airbus’s A321 variant.

Airbus Scale-Up

Petitcolin said he had no information on Boeing’s plans. Safran is meanwhile “doing everything” to meet Airbus’s target for increased A320-family production in the second half of 2021, the CEO said.

Availability of parts could create challenges for Safran, he said, after some of its U.S. suppliers halted output. Discussions to get them under way again are “on the right track,” he said.

©2020 Bloomberg L.P.

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