BA May Announce Its Future Narrow-Body Plans After Airbus Declares Its Re-Engining Plan
According to Wells Fargo Securities, the 24th Annual SpeedNews Aviation Industry Suppliers conference and the Air Transport Research International Forum (ATRIF) reflected that “the suppliers seemed less optimistic about a recovery than investors, with concern about production rates in 2011 and beyond. However, the recent passenger and traffic trends continue to improve which we believe supports our more positive view on United Technologies (NYSE: UTX) and Goodrich (NYSE: GR) as well as Market Perform Boeing (NYSE: BA) and Precision Castparts (NYSE: PCP)." The analysts believe that “Airbus is closer to deciding on a re-engining plan with an announcement by July's Farnborough Air Show.”
Wells Fargo Securities expects BA to announce “its decision on its future narrow-body plans after Airbus' announcement. Boeing's current analysis is focused on comparing a re-engining program to the launch of a clean-sheet narrow body aircraft replacement." "We expect Boeing's decision to be announced by the end of 2010, and we would not expect a formal announcement of a new aircraft at that time, but believe a decision to not re-engine the 737 would effectively imply that Boeing intends to launch a new narrow-body within a few years…We believe a re-engining program from Boeing or Airbus may impact narrow body production rates as customers with existing orders factor that into their decision on which plane is preferable,” the analysts add.
