Boeing Weighing Where to Build New 777

Dubai Air Show
Duncan Chard/Bloomberg via Getty Images
DUBAI -- Boeing expects to make a decision on where to build a new version of its 777 passenger jet within 2-3 months, Chairman and Chief Executive Officer Jim McNerney said Monday.

"We will be announcing within next 2-3 months very specifically plans for manufacturing," he told reporters at the Dubai Airshow.

"We have a number of alternatives and we are in the process of considering them."

Boeing (BA) won orders worth some $100 billion as it launched a revamped long-haul jet previously known as 777X at the show.

McNerney dismissed concerns that big orders from three Gulf airlines could result in too much capacity coming into the Middle East as airlines compete for the same business.

"This region is for real and we are just gratified that we could be part of it," McNerney said.

"From time to time people wonder if the investment in infrastructure here is sustainable and my observation is that it is. As I watch as an industry participant, I see them opening routes and performing and filling planes."

The 406-seat twin-engined 777-9 model is smaller than the 467-seat 747-8 but is widely expected to compete with the larger four-engined plane on fuel efficiency.

"There is no question that the 777 puts pressure on %VIRTUAL-article-sponsoredlinks%bigger planes and our concept all along has been that there is a role for the 747 as a niche passenger plane and as a freighter," McNerney said.

"Our numbers have taken that into account and both remain viable business propositions."

McNerney said Boeing was entering a period of cash generation as it winds down some major developments and enters a phase of higher production, but declined to predict how this would affect the company's dividend policy.

He said the company was "riding a little low" compared to the historical average for its payout ratio, but declined to say how this might affect its dividend policy, on which he expected some clues as it gives guidance for next year.

The U.S. manufacturer will firm up the configuration of the new version of the 777 aircraft in 2015 and plans to have a detailed design by 2016.

Production will begin the following year, with the first test flight scheduled for 2019 and first delivery in 2020, Boeing's vice president and general manager of airplane development Scott Fancher said.

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