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Boeing Co. 737 Max planes are seen at the company’s manufacturing facility in Renton, Washington, U.S., on Tuesday, Mar. 12, 2019.

David Ryder | Bloomberg | Getty Images

Jefferies expects Boeing to launch a new plane later than its analysts anticipated as the company grapples with an ongoing crisis related to its 737 Max plane.

The analysts believe Boeing was likely close to announcing a new midsized aircraft in March when the second of two fatal crashes occurred involving its 737 Max model, killing a total of 346 people. The Max planes remain grounded around the world, with U.S. investigators looking at how the model was approved by regulators.

“There has been a lot of speculation about a potential NMA launch, although tempered by the 737 MAX grounding,” Jefferies analysts Sheila Kahyaoglu and Greg Konrad wrote in a note to investors on Sunday. “However, this appears pushed out [with its entry into service] from 2025 likely extending to 2028.”

NMA, which stands for “New Middle Market Aircraft” and is dubbed by industry insiders as the 797, is a concept believed to be a replacement for Boeing’s aging 757 and 767 models. Jefferies believes there will likely be two versions of the NMA: A 220 to 250 passenger jet and a 240 to 290 passenger jet.

Boeing has said it expects to decide whether to launch the NMA in 2020, but Jefferies estimates the company will wait on that, too, until it stabilizes the 737 Max program. Boeing is working with the Federal Aviation Administration to fix the system believed to have caused the crashes. On Thursday, Boeing said it has completed the software update it needed for the system and is scheduling a re-certification flight with the FAA.

Jefferies said it “interviewed several airline executives, in addition to lessors” around the world this spring, to find out what they would want to see from Boeing in the NMA. In responses that Jefferies said were “very consistent across executives,” airlines want Boeing’s NMA as “either a replacement for the B757 or B767 or ultimately a down-sized B787.”

That’s because both the 757 and 767 aircraft are getting old. Jefferies estimates the average age for those aircraft in service is about two decades. As a result, NMA has a potentially worthwhile market size of “200 aircraft over 20 years,” Jefferies said.

Boeing’s 787 “Dreamliner” has been a game-changing aircraft for the company, according to Jefferies, as it has opened up more than 210 new markets. The firm expects Boeing’s NMA will likely be akin to “a down-sized” 787 jet, as airlines have preferred the “widebody” aircraft to “narrowbody” jets of similar performance and passenger capacity.

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