Boeing shows off first 737 MAX as Airbus surges ahead on orders

By Alwyn Scott

NEW YORK/SEATTLE (Reuters) - Boeing Co on Monday showed off its newest jetliner, a second major revamp of the workhorse 737 it introduced 50 years ago, as its best-selling plane shows signs of losing some ground in the marketplace to rival Airbus.

At its Renton, Washington, factory on Monday, Boeing showed media the second 737 MAX to be built. On Tuesday, employees will see the first finished plane in a no-frills ceremony marking a major milestone in the jet's development.

The latest version of Boeing's best-selling 737, introduced in the mid-1960s, is due to make its first flight early next year and reach customers in 2017. It will burn an estimated 14 percent less fuel per seat than current 737s and fly farther, allowing airlines to open new routes.

 

But Airbus' competing A320neo is outselling the 737 MAX, even as both plane makers face challenges to sell their fuel-efficient jets as oil prices remain far below the levels when both of the new jets were initially offered to customers.

On Monday, Airbus said the A320neo had captured 60 percent of the market by sales, tipping the typical half-and-half split sharply in its favour.

Boeing has pledged to close the sales gap, and that it is too early to judge the balance between the two models. It says only deliveries will decide which model ultimately gains the upper hand and on that front, Boeing is winning. It has delivered 457 of its 737s this year, versus 436 A320s by Airbus.

But the order book gap is growing. So far this year, Boeing has garnered 292 orders for the 737 MAX family, down from 781 in the same period last year.

By comparison, Airbus said it booked 825 orders for the A320neo family in the first 11 months of the year, up from 782 in the prior-year period.

Airlines plan to use the 737 MAX on new routes. Norwegian Air Shuttle , for example, said it will use the first 14 of its 737 MAXs on trans-Atlantic routes connecting perhaps a dozen cities. Half of those routes are being flown by other carriers using larger Boeing 757 and 767 aircraft, Thomas Ramdahl, the airline's chief commercial officer, said in a recent interview.

(Additional reporting by Jeffrey Dastin in New York and Bryan Cohen in Seattle; Editing by Cynthia Osterman and Bill Rigby)