Airbus might announce next month that it plans to put fuel-efficient engines on its popular narrow-body aircraft, the A320. But Rolls-Royce is balking at the idea, insisting that an all-new aircraft is the only option that makes economic sense. Some airlines appear to agree with Rolls' stance. Southwest Airlines, the largest buyer of Boeing's narrow-body 737, said "marginal improvements" to the engine do not justify the huge investment needed to upgrade a fleet. "The time has come to develop a replacement to the workhorse narrow-bodies," the company's chief operating officer said at an industry conference in June.

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