Boeing Co. has started to market an upgrade of its 777 jet, the company's biggest twin-engine model, as it nears a final decision to build the plane amid mounting pressure from Airbus SAS's A350.
Pricing and scheduling for the so-called 777X are part of the talks with customers, Karen Crabtree, a spokeswoman, said yesterday in a telephone interview. While the board has yet to give clearance for production, Chicago-based Boeing still targets a commercial debut near decade's end, she said.
Boeing is betting that a new 777, with composite-plastic wings and more-efficient engines, will cement its lead in the market for wide-body jets typically used on long-haul routes. Airbus is fighting back by winning more orders for the largest version of its A350, including a planned purchase last month of 18 planes from longtime Boeing buyer British Airways.
"There's market pressure on them to get this done and I think they're taking the right step," said Ken Herbert, a San Francisco-based analyst with Imperial Capital LLC. "Boeing knows they have to do it. They can't wait."
Boeing rose 0.5 percent to $91.62 at 9:40 a.m. in New York. The shares jumped 21 percent this year through yesterday, outpacing an 11 percent advance for the Standard & Poor's 500 Index.
The timing for Boeing directors' final approval to build the 777X will depend on market response, Crabtree said. "Boeing is taking the next step -- engaging in the marketplace, discussing more details and offering the airplane to customers," she said.
Airbus had no immediate comment about Boeing's plans for the 777X. The Toulouse, France-based planemaker is scheduled to begin deliveries of the biggest A350, the A350-1000, in 2017.
Current 777 operators such as British Airways and Dubai- based Emirates have been demanding that Boeing commit to the new plane so they can craft their own long-range fleet strategies. They also have been pushing Boeing for more information about the aircraft, said Herbert, who rates the stock in-line, the equivalent of hold.
Technical data are part of the discussions with prospective customers, Crabtree said.
Boeing's largest proposed variant of the 777X probably will have about 407 seats and a 21 percent advantage in fuel economy over the current 777-300ER, according to a note today from Howard Rubel, a Jefferies & Co. analyst in New York who rates the stock as buy.
Offering the new plane is a chance to "limit the A350's market," Rubel wrote. Prospective buyers could use the 777X to replace older versions of Boeing's 747 jumbo jet and build on their current 777-300ER fleets, he said.
"Our industry order estimates had factored about 200-250 launch orders from a range of carriers," Rubel wrote.
Boeing hasn't published a price for the 777X. The list price of the 777-300ER is $315 million, making it Boeing's second-most expensive plane, trailing only the 747-8 jumbo jet. Airlines typically buy at a discount.
Boeing signaled in March that it was ready to move ahead with the upgrade when it named Bob Feldmann as vice president and general manager of the 777X project. Feldmann had overseen the development of the single-aisle 737 Max, a new version of Boeing's best-selling aircraft.
Directors approved marketing of the 777X during an April 29 meeting in Chicago, according to the Wall Street Journal, which cited a person familiar with the decision.
Crabtree, the spokeswoman, declined to comment on whether the board had given the clearance.