By the end of March, Boeing Co. (NYSE: BA) will have started construction on a final assembly plant in China for the company’s 737 passenger jets. The U.S. company signed an agreement last October with Chinese plane maker Commercial Aviation Corp. (aka, Comac) to develop the plant, which is expected deliver its first finished airplane sometime next year.
When fully operational the final assembly plant, located in Zhoushan, is expected to deliver 100 finished aircraft per year. Workers at the plant will install in-flight entertainment systems and seats in planes destined for China-based airlines. Boeing also will build and operate a 737 delivery center.
At an industry conference in San Diego last week, Boeing revealed specifications for a new member of the 737 MAX family — the 737-10, a stretched version of the 737-9 that seats the same number of passengers (according to Boeing) as the Airbus A321neo. Boeing also claimed the new airplane would cost 5% less to operate than the A321neo. Airbus, of course, disputed both claims.
Boeing did not reveal the list price of a 737-10, but it is likely to be slightly less than the $124.4 million list price for the A321neo. Here is the current Boeing price list for the 737 family:
- 737-700: $80.6 million
- 737-800: $96.0 million
- 737-900ER: $101.9 million
- 737-7 (MAX 7): $90.2 million
- 737-8 (MAX 8): $110.0 million
- 737-200 (MAX 200): $112.9 million
- 737-9 (MAX 9): $116.6 million
According to a report at Leeham News, China Development Bank (CDB) Leasing is a believer in the 737-10. CDB Leasing has about 250 airplanes in its portfolio, with lease customers in China and elsewhere. Boeing thinks that combined sales of the 737-9 and 737-10 will account for about 25% of all sales in the new MAX versions of the 737.
Boeing hopes for an official launch of the 737-10 this year but has not yet officially specified an entry-into-service target. Leeham News cites Market Intelligence with a planned date of 2020, but another big leasing customer, Air Lease Corp. (NYSE: AL) CEO John Plueger thinks that is too late and that the 737-10 needs to enter service no later than 2019.
Boeing’s stock traded down about 0.4% early Monday morning, at $178.02 in a 52-week range of $122.35 to $185.71. The consensus price target on the stock is $173.75, according to MarketWatch.
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