Boeing Co. is close to scrapping the 787-3, a short-range version of its 787 Dreamliner, after its two Japanese customers opted to convert to the 787-8 version.
"Both Japan Airlines and ANA have converted to the 787-8. The 787-3 that had a shorter wingspan was designed for Japan and now there are no customers. It will be far fetched to say that we will proceed with the 787-3," Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, told a press briefing at the Singapore Airshow on Tuesday.
The first 787 will be delivered to All Nippon Airways Co. (9202.TO) in the fourth quarter after its maiden flight last December.
Tinseth expects airlines to return to profitability in 2011 as global economic conditions improve and sees demand for new aircraft increasing in 2012.
For this year, Boeing expects fewer orders than deliveries as the global economy isn't yet on a firm footing. The company expects to deliver between 460 and 465 planes in 2010 compared with 481 deliveries in 2009.
"We believe we have reached the bottom of the economic cycle, but growth remains slow and uneven " Tinseth said, adding that Boeing is seeing fewer cancellations or order deferrals compared to last year.
In 2009, Boeing saw 121 cancellations out of 262 plane orders. Boeing currently has a total order backlog of close to 3,400 planes worth $250 billion.
Tinseth said the Asia-Pacific region will lead the global economic recovery and that he expects global passenger traffic to grow between 4% to 5% this year, while cargo traffic is likely to increase between 7% to 8%.
Asked whether the recent tension between Washington and Beijing over a U.S. decision to sell weapons to Taiwan will affect Boeing's sales to Chinese carriers, Tinseth said: "It's a government to government issue and it's premature to speculate the impact on our industry or business."
"China remains a huge market. They will need 3,800 commercial airplanes valued at $400 billion over the next 20 years," he said.
Tinseth said Boeing was looking at options for its popular 777 model.
"At some point we will think of replacing the plane, but as of now we are looking at potential improvements. We have four to six years to decide on this," he said.
Earlier in the day, Tinseth told Dow Jones Newswires that he doesn't expect any new plane orders at the Singapore Airshow and remains cautiously optimistic for the rest of the year.
"It's a challenging environment as the world still emerges from the crisis," he said.
He said he expects no order cancellations from Japan Airlines Corp. (9205.TO), which declared bankruptcy in January.
"We have 71 planes on order from JAL. They are looking very hard at their fleet requirements and we are assisting them."
He said "low-cost carriers in Asia remain very strong" and that Boeing expects "significant demand for single-aisle aircraft in the region."
Tinseth added that Boeing was still looking at engine options for its 737 planes.