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Analyst: Boeing likely to re-engine 737s, keep plane around another 15 to 20 years

Boeing continues to modestly improve its flagship 737 jetliner and is introducing improvements next year to  improve fuel burn by 2 percent. The amount of fuel a jetliner burns is a big deal to airliners.

In addition, Boeing plans to add a 787-inspired Sky Interior this year.The interior has a “wow” effect that will overshadow Airbus’ 2007 update of the interior of the A320 family, wrote Leeham analyst Scott Hamilton.  The improvements keep the 737 slightly ahead of the A320 family in “performance, look and feel,” he wrote.

But in Hamilton’s view, the advantages will be short-lived.   Airbus will introduce a winglet for the A320 in 2012, followed by winglets for the A321 and A318, a move that will  improve fuel burn by about 3.5 percent.

Boeing may be able to “live with” the situation since the lighter-weight 737 means lower landing fees and reportedly somewhat less maintenance, he said.  Plus the 737-800 carries 12 more passengers than the A320, giving airlines greater revenue opportunities.

But Airbus, in Hamilton’s view, will decide this year to move forward with a re-engining program for the A320 family that would improve  fuel burn by 12 percent to 16 percent.

“Boeing cannot let this stand, and we believe Boeing will likewise announce a re-engine program for the 737,” Hamilton wrote.

The improvements will push replacement airplanes for the 737 and the A320 out to the latter half of the 2020 decade, he said, unless “some regulatory environmentally-based legislation intervenes or a dramatically better airplane technology emerges in the first half of the 2020 decade.”

The 737 and A320 should be around another 15 to 20 years, he said.

And that would be good news for Spirit AeroSystems in Wichita, where the 737 fuselage is built.