Boeing may not have made a decision on whether to re-engine its 737 in response to pressure from the Airbus A320NEO (new engine option), but the answer is obvious to Steven Udvar-Hazy. The U.S. airframer must resist pressure to re-engine and proceed with development of a next generation narrowbody, says the influential chairman and CEO of Air Lease Corp.

“Boeing needs to show leadership,” Udvar-Hazy told Aviation Week at the Paris air show, reiterating comments he first made to the Seattle Times on June 19. “The next logical step would be to build a new family.” He noted that the original 737 family dates back to 1967.

Boeing officials have stressed that their preference is to develop an all-new narrowbody that would leverage some of the game-changing composite structural technologies developed for the 787. But such an aircraft would not be ready until 2019 or 2020, about four years after the A320NEO is scheduled to enter service. Some Wall Street analysts believe Boeing risks losing a lot of business to the NEO if it waits that long.

Udvar-Hazy disagrees. “Airbus won’t have that many [order] positions left after this air show,” he says. “If [Boeing] can get it out by 2019 or early 2020, we’re very interested.”

Boeing says it will make a decision on whether or not to re-engine by the end of 2011. “We have the design pretty much on the shelf to do the re-engine,” Boeing Commercial Airplanes CEO James Albaugh told an air show press conference earlier in the day. The question is, “Do we want to evolve … or do we want to take more risk and design an airplane for the next 50 years.”