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Seattle, Washington - The slowdown in the aerospace industry and the financial situation of Boeing have raised concerns about the probability of delivering the long-stalled New Mid-market Airplane (NMA), two aerospace analysts say.

Those analysts also claim that the NMA will be a success despite the current crisis because the demand will explode for these jets after all settled.

“This crisis is raising questions about Boeing’s ability to proceed with NMA,”

says Michel Merluzeau, an analyst with consultancy AIR.

“You can’t really gamble the future of the organization on a new program at this time,”

he added.

“This crisis strongly increases the need to do it, but strongly decreases the likelihood [Boeing] will,” 

Teal Group analyst Richard Aboulafia says.

Boeing refuses to comment on the NMA project's progress, saying that its attention remains on getting the 737 MAX back into operation.

“Our team continues to study the market and develop plans for future commercial airplanes, including taking a step back and reassessing our commercial product development strategy, building on the work we have done as part of the NMA design and production system analysis,” 

Boeing said in a recent statement.
The NMA project stalled in the wake of the 737 MAX grounding that came into force in March 2019 after two fatal crashes. Boeing CEO Dave Calhoun said earlier this year that Boeing was undertaking a fresh NMA review.

Meanwhile, Airbus took the attention of the market with its two mid-market A321neo variants, A321LR and A321XLR.

But today, the conditions are very different than a few months ago. Air travel was hit severely by the current outbreak and there is no quick recovery on the horizon. Airlines have already begun to cancel their aircraft orders and many of them are relying on government bailouts to survive. Nearly 60 percent of passenger jets were grounded globally.

Mr. Aboulafia suggests the slowdown would likely boost demand for mid-market aircraft, and A321neos are currently the only jets to fill this gap. He predicts around 40% single-aisle aircraft delivery will be mid-market planes by the end of this decade.

“People can’t get rid of widebodies fast enough, and the A321neo is a great widebody replacement. Even more so now.”

he says.

As of the end of March, Boeing had only $30 billion cash left, maybe less. Possibly those funds will run out in eight to 10 months, analysts said. Such factors could drive Boeing to shelve the NMA program, the analysts claim.


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