Boeing Co.’s share price up, works on a modified 737 to answer low-cost carrier demand

The Chief Executive Officer of the commercial airplane division of Boeing Co., Mr Ray Conner, revealed just ahead of the Farnborough Air Show that the company is working on a modification of its 737 model, which is to have a higher capacity. The narrow-body model targets primarily discount airlines, boarding as many passengers as comfort allows.

The new modification of the 737 jet is expected to have up to 200 seats. According to the companys statement, the new offering is to be 5% more efficient per seats compared to the one without an extra door. As Mr. Conner explained, the new model of the companys jet is to have a bit larger expenses, which however, will be distributed over the greater number of passengers of the short-distance flights.

The Chief Aircraft Salesman of Boeing Co., Mr. John Wojick, commented in an interview, which was cited by Bloomberg: “When you’re in the low-cost, low-fare business, you’re always striving for that competitive advantage.”

The news of the company working on improving its narrow-body model jet comes at a time when Boeing has also said that its unlikely for its defense division to increase its revenues before the end of the decade. Boeings Chief Executive Officer, Mr. James McNerney revealed that the aerospace and defense business of the U.S.-based company intends to seek U.S. contracts for an improved version of a long-range bomber and air force trainer jet.

Mr. McNerney said in an interview for the Financial Times: “We have to shape that business to remain profitable and then we have to take some market share in some of the big new US defense programs.” The companys Chief Executive Officer also explained that Boeing had “strong offerings” in the three largest upcoming defense programs on the territory of the U.S.

Boeing Co. was 1.03% up to close at 128.09 dollars per share on Friday, marking a one-year change of +25.74%. According to information published on CNN Money, the 23 analysts offering 12-month price forecasts for Boeing Co. have a median target of 157.00, with a high estimate of 175.00 and a low estimate of 127.00. The median estimate represents a +22.57% increase from the last price of 128.09.