State-owned Commercial Aircraft Corp. of China Ltd., or Comac, next year is expected to test its first single-aisle aircraft, the C919, and deliver the jet in 2018. Mr. McNerney expects Comac to develop the jet and become a serious competitor in the next decade, requiring Boeing to respond.
He said the U.S. plane maker, which is already in the process of revamping its single-aisle 737 jet, would consider building a new aircraft made from carbon fiber composite materials that could be delivered before 2030.
"We will eventually compete by offering something at the same price that does a lot more," Mr. McNerney said.
The new plane would replace the 737 Max, an upgraded version of the jet currently in production, which features new engines and is due for delivery from 2017.
Boeing executives have previously indicated they anticipate an all-new design emerging around 2030.
Airbus, the world's No. 2 jetliner maker, has similar plans and is working on its own single-aisle jet upgrade to satisfy demand from airlines for more fuel-efficient planes. The European A320neo, set to enter service next year, is the direct competitor to Boeing's 737 Max.
Mr. McNerney said a completely new single-aisle jet would incorporate much of the innovation developed for its lightweight and more fuel-efficient 787 Dreamliner widebody jet, as well as its planned 777X family of aircraft due to enter service in 2020.
Industry officials are skeptical about when Comac's C919 will actually come to market. The project has suffered several delays.
Still, Mr. McNerney said Boeing would want to launch a new plane by the end of the next decade because China will eventually have a viable competitor.
"We have to do that airplane because at that point the entrant will be doing something like the Max," Mr. McNerney told a conference on innovation in Abu Dhabi. "Keeping up purely on price will be difficult."
Airbus and Boeing have demonstrated a willingness to launch new planes to preserve their duopoly.
Airbus launched the A320neo program after Bombardier Inc. started developing its CSeries narrowbody jet. Boeing then responded with the Boeing 737 Max. Bombardier has struggled to win CSeries orders since.
Orders for single-aisle aircraft have spurred a glut of total jet orders for both Boeing and Airbus in recent years as U.S. and European airlines replace aging fleets and Asian, Latin American and Middle Eastern carriers expand.
Both plane markers predict the single-aisle market to continue to grow, just as Comac begins delivery and ramps up sales of its aircraft. U.S. and European industry officials agree that China will eventually be a force in the single-aisle market, though it may take time to establish itself.
Boeing projects global demand for 25,680 single-aisle aircraft over the next 20 years, while Airbus estimates that buyers will require about 22,000 such planes.
Source: Wall Street Journal by Rory Jones
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