Boeing’s Albaugh Expects ’Very Good Show’ as Dubai Expo Opens
Boeing Co. (BA) is confident about prospects for the Dubai Air Show, as the U.S. aircraft maker comes to the Middle East with two new planes in service and 700 commitments for its 737 MAX, a senior executive said.
“I expect to have a very good show,” Jim Albaugh, the chief executive officer of Boeing’s commercial jet division, told journalists yesterday at a briefing ahead of the show’s opening today. “They get better and better every year,”
The company brought the 787 Dreamliner into commercial service last month after three-and-a-half years of delays, and Boeing has also handed its 747-8 freighter over for commercial operation. That’s giving the company a boost after being overrun by European rival Airbus SAS on orders for smaller jets at the Paris Air Show four months ago.
Boeing has since responded to Airbus’s success in the single-aisle market by also offering new engines on its competing 737 jet. Boeing has now lined up nine customers for about 700 of its re-engined 737, called the 737 MAX, a hundred more than last week. Albaugh said there are no customers yet for that plane in the Middle East,
Albaugh, 61, who has been running the airliner unit since 2009 after overseeing the Chicago-based company’s defense division, declined to name carriers that he expects to announce orders in Dubai. He said Boeing is confident to win orders for its 777 wide-body jet. The show is traditionally geared to larger aircraft that are popular with carriers including Emirates.
Even after getting its board to approve the move to add new engines in August, Boeing’s not taken any firm orders for the 737 MAX because it has still been discussing both performance guarantees and pricing with customers. Albaugh said those discussions may be wrapped up in 2011, allowing Boeing to begin converting preliminary commitments into firm contracts.
Boeing said the plane will be available from 2017. Albaugh cautioned that he’d aim to be conservative with promises, given the delays on the 787 Dreamliner and the latest upgrade of its 747 jumbo jet.
“One of the things I learned from the 787 and the 747-8 was that we don’t want to over-promise and under-deliver,” he said. “But we’re trying to drive the team for more aggressive scheduling.”
Customers can’t get planes as early as they’d like because both manufacturers have such long backlogs, Albaugh said. While investors are pleased to see thousands of planes on back order, customers don’t like the long wait for new aircraft, he said.
Boeing already has plans in place to boost production of its narrowbody, or single-aisle 737s to 42 a month and could go further, Albaugh said. Airbus itself has committed to a rate of 42 a month and is considering going to 44 a month.
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