As major manufacturers fight for their definition of what future 100-200-seat, single-aisle aircraft will look like, they at least have the advantage of talking to an industry that has access to low-interest loans and financiers impressed with the discipline airlines showed in bouncing back from the global recession.

But the competitive landscape is fluid. More airplane owners are not tied to an airline brand, so manufacturers have to build aircraft with that in mind. They have in widebodies, but Airbus and Boeing’s single-aisle designs date back to a day when leasing was less important.

As healthy as airlines are—the International Air Transport Association estimates $16 billion in 2010 net profits globally—they face constant shocks over which they have little control. Oil prices and political, economic and natural calamities top the list, with Japan’s earthquake and tsunami providing a poignant example of the latter.

Five years ago, China did not even have a market for leased cars; today it is pouring funds into aviation, says Steven Townsend, deputy managing director and chief commercial officer for Bank of China-owned BOC Aviation, now Asia’s biggest lender and a fast-rising powerhouse globally.

Two key parameters for the mix of legacy and upstart carriers that operate single-aisle jets are purchases to accommodate growth and replace old aircraft. About half of each will need financing, says Steven Udvar-Hazy, the executive who helped start aircraft operating leases.

“In just the next five years, 5,000 aircraft are to be built, 40% of them on operating leases,” he says. In that mix, just seven or eight leasing companies will do the “heavy lifting,” he says.

GE Capital Aviation Services President/CEO Norman Liu agrees that the market is tightening. “It’s becoming a game of scale, over time,” he says.

“It’s going to be a tremendous opportunity and great challenge in terms of financing and operations in [the leasing] market,” Udvar-Hazy, chairman/CEO of Air Lease Corp., said here last week at the annual International Society of Transport Aircraft Traders (Istat).

It’s not just the old rules of financing that are changing; so are the rules of who might be manufacturing this century’s single-aisles. Canada’s Bombardier is challenging the Airbus-Boeing duopoly for 110-130 seats; China’s Comac is learning the game with the 150-seat C919; and Irkut wants to revive Russia’s airplane heritage with even larger single-aisles.

But for now, the focus is on how the duopoly will respond. Airbus has written the first part of the competitive equation by insisting that airframe technologies will not be mature enough to support an all-new single-aisle family until at least the mid-2020s. Instead, it is pursuing an incremental approach of product improvement, seizing on powerplant advances from Pratt & Whitney and CFM International to offer a New Engine Option for its A320 family for a service entry in 2016. Sales of at least 4,000 NEOs are projected, Marketing Vice President Andy Shankland told Istat. If that happens, Airbus’s greatest success story will reach about 12,000 orders.

Boeing has yet to move. It is worried, says Boeing Commercial Airplanes President/CEO James Albaugh, about a poor business case for a Boeing 737 re-engining effort. Although “officially” still studying the re-engining versus new airplane issue, Albaugh’s skepticism prompted twice as many of the Istat crowd responding to an instant electronic poll to conclude that Boeing will build a new airplane as to conclude it will re-engine.

“Those of us who know Boeing, their DNA, see them as more likely to go for a new airplane” says Udvar-Hazy, who was Boeing and Airbus’s largest customer when he was CEO at International Lease Finance Corp.

More generally, Albaugh says Boeing is searching for a formula that brings a worthy successor to the industry’s longest-serving and best-selling aircraft line while not getting carried away with its design. “Southwest Airlines has taught us over the years: do not add to the complexity of what [we] do,” he says.

Albaugh readily acknowledges that the Boeing 787 program, which is now three years late and swimming in billions of dollars in R&D over-spend, was bathed with complexity. Boeing has already said it will co-produce the 737NG and its successor to assuage memories of the pain it caused airlines when it abruptly cut off 737 Classics with the shift to the NG. But his comment that NGs could be produced for another 20 years was startling.

Liu says he can appreciate what Boeing is struggling with. “It has to build for the low-cost carriers, the network guys and those in emerging markets that just want everything bigger,” he says.

If it proceeds with a successor while Airbus follows the more conservative re-engining route, Boeing will be displaying a high degree of confidence that it can master a lot of new technologies in airframe design, materials and manufacturing for single-aisles that have been troublesome in the 787, its premier widebody effort. But Boeing’s strategy will carry some advantages. It can allow Airbus’s NEO and other single-aisle competitors introducing Pratt & Whitney’s PW1000G turbofan or CFM International’s Leap-X technology to work through some of their inevitable challenges. It also will have time to respond to Rolls-Royce’s desire that its RBR282 design be in the running.

Although long-range twin-aisles typically require more technology for flight and passenger services than single-aisles, Albaugh says the option possibilities for a 737 successor are a worry. For instance, besides airframe changes, will airlines accept the complexity of fly-by-light flight controls to save weight? “We could get to an eye-watering number,” he says. “We have to limit technologies. I don’t want this airplane to be the son of 787.”

Boeing has shown a willingness to take on airframe risk that Airbus shies away from. The 787’s single-piece composite fuselage assemblies are more technically risky than the composite panels Airbus selected for the A350. But, aside from manufacturing boldness, there are other issues at play in the apparent divergence in the pace at which two airframe makers are progressing. “It’s not a question of who’s right or wrong; it’s a question of resources,” says Liu.

Udvar-Hazy points to the money tree. “The A400 and A350 XWB, both running ahead of budgets, will tap [Airbus parent] EADS for the next 4-5 years, so Airbus won’t have the money to launch a new airplane,” he says. “Airbus did the most intelligent thing it could: Take advantage of the engine technology, where the R&D is being expended by Pratt and CFM.

“Boeing is totally different,” he says. Compared to the A320, Boeing’s best-selling 737-800 has more seats and slightly lower unit costs. With that advantage, it has bought time with “micro steps” for the NG family—a new cabin interior and a bump-up in the efficiency of the CFM56-7B engine. By the end of the decade, says Udvar-Hazy, “the 787 will be flying and they can move on to a new airplane.”

Liu, who heads the industry’s largest leasing group, agrees. “Boeing learned a hell of a lot over the last three years” with the 787. He is betting it can hit the end-of-decade service entry mark.

The plurality of Istat members who think Boeing will develop a new airplane were responding to a question about an aircraft family seating 150-250 passengers, not the current levels of 100-200.

The top end of that seating raises questions about efficient passenger loading. Udvar-Hazy suggests that Boeing build the industry’s first twin-aisle specifically designed for regional operations.

New airplanes aimed at serving higher passenger counts are a trend Airbus and Boeing agree on. Traffic growth and higher yield prices have made 125-seat airplanes appear too small to many carriers for economically efficient operations, explains appraiser Fred Klein, president of Aviation Specialists Group.

But while the majority of airlines move away from smaller single-aisles, there is room at the bottom for an airframe specifically sized to seat 110-130 passengers, says Bombardier President Gary Scott.

Scott has no ambitions for his CSeries to breach the 150-seat mark, as the Chinese and Russians do. But give him 130 seats, and Bombardier will be happy. “There’s just a lousy $600 billion [market] below 150 seats,” he quips, citing Boeing’s own 20-year traffic forecast.

But Bombardier has not received a new CSeries order in a year and holds just 90 that are firm. Townsend says it’s a matter of the Canadians finding “the right price point.”