Visitors look at a display model of a Boeing 737 passenger plane during the Singapore Airshow. N (Roslan Rahmna/Getty)

Associated Press | Expect a decision by midsummer on a new
version of the world’s most popular jetliner, the 737, Boeing chairman
Jim McNerney said Thursday.

If the company moves forward with an updated 737 with new-technology
engines, McNerney told analysts at a conference put on by investment
firm Cowen and Company, the new version should be rolling off the
assembly lines by the middle of the decade.

A decision on the fate of the company’s best-selling plane could be
followed in early 2011 by a decision on a redo for the company’s
midsize twin-jet, the 777, the company chairman said.

The decision-making process is being driven in part by new technology developments and competitive pressure.

Canadian, Russian and Chinese planemakers are all entering the lower end of the 737 size range with new planes carrying 100 to 150 passengers powered by new-technology engines. And in the large size, twin-aisle market, Boeing rival Airbus is considering building a stretched version of its A350-XWB widebody called the A350-1000 that would encroach on the 777’s size range.

Airbus is also considering re-powering its A320, its competitor to the 737.

“What it finally gets down to is how big is the productivity and performance leap that’s available through re-engining for our customers,” said the Boeing CEO. “If you try to force a re-engining and it doesn’t provide enough productivity or performance for your customers, all it does is suck orders out of your current airplane, and yet if it does provide a big enough leap, it will be worth it,” he said.

Both Boeing and Airbus in recent years had considered creating fresh single-aisle planes using composite technology such as that used in Boeing’s new 787 Dreamliner.

But both aircraft makers, burned by new plane development that has proven far more expensive and difficult than they planned, have shied away from building clean-sheet aircraft in the single-aisle category until technology advances far enough that the new design will yield a major leap in efficiency.

Instead, they’re now looking at installing new engines that could improve fuel efficiency 12 percent to 15 percent over existing designs and, in the case of the 777, perhaps designing a new composite wing that could reduce weight, improve aerodynamics and cut maintenance.

Creating updates of the two planes rather than new designs could cost perhaps 30 percent of the costs of creating new planes from scratch. The updates could also mean more assurance of continuing business for the Western Washington factories where the planes are now built. Boeing has said it might hold another contest to determine where to build new-design planes as it did with the 787 Dreamliner. Boeing will build some of those planes in South Carolina. Boeing builds 737s in Renton and 777s in Everett.

Boeing could offer more than a single brand of engine for the 737 this time around. The 737 is now offered only with an engine built by CFM, a partnership of General Electric and France’s Snecma. All three engine-makers, Pratt &Whitney, Rolls Royce and General Electric, are designing new engines for the A320 and 737.

“The engine boys, they are pushing very hard,” McNerney said. “They are very convinced — virtually all three of the major ones are convinced — that they have the technology that will give us enough, but I think we’ve got to vet that, and I think we’ve got to spend a lot of time talking to customers this year, but this will be the year we make the call.”