Boeing exec says new mid-market is 'tough business case'

Tue Mar 1, 2016 11:12pm EST
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PHOENIX (Reuters) - Boeing Co (BA.N: Quote) is studying options for an aircraft in the middle of the jet market, but faces a "tough business case," Marketing Vice President Randy Tinseth said.

Speaking at the Istat Americas air finance conference, he ruled out reviving the out-of-production 757 with new engines because of the previously high production cost.

The middle of the jet market is widely seen as a "grey space" sitting between workhorse narrow-body jets like the Boeing 737 or the larger and more capable wide-body jets.

Ron Bauer, vice president for fleet planning at United Airlines (UAL.N: Quote), predicted demand for an aircraft with longer range than the 1980s-vintage 757, a narrow-body jet which has been popular with airlines for its high performance.

"We look at it as a 757 on steroids," he told the gathering of aircraft financiers.

Boeing is exploring whether to build a new plane, which industry sources say could be a small twin-aisle plane, rejig an existing model or do nothing.

"We are looking at a number of options...but as you look at those you have to have a business case that works," Tinseth said, adding "it is a tough business case".

Jeffrey Knittel, president of lessor CIT Transportation (CIT.N: Quote), said he saw potential demand for 1-2,000 such jets, which could connect New York to secondary European destinations like Barcelona.

But industry experts are debating whether it is a market sweet spot.   Continued...

Visitors talk outside a Boeing booth during the opening day of the Singapore Airshow at Changi Exhibition Center February 16, 2016.  REUTERS/Edgar Su