Boeing may be redesigning its most popular plane to fix a 'major mistake'

The 737 is Boeing's bread and butter product.

Over the past five decades, its has become the best-selling airliner of all time with more than 13,300 jets ordered in the model's history.

But now, industry sources tell Reuters that Boeing may be ready to make significant changes to the 737 in order to fill a gaping hole in its product lineup left by the defunct 757.

The rumored plan would call for a new version of the 737 nicknamed the "MAX10" or the "Mad MAX."

A Boeing spokesperson declined to comment on the existence of the rumored jet.

All of this stems from a decision the company made back in 2004.

In 2004, Boeing discontinued the medium-range, twin-engine 757 after more than 20 years in production.

A decade later, the aging, but highly versatile 757 has now become a highly coveted asset for its operators. Unfortunately, airlines simply have not been able to find a new aircraft capable of delivering the range, performance, and profitability of the 757.

Airbus and Boeing's current offerings - the A321neoLR and the 737MAX9 - are both widely seen as partial replacements for the 757, but both are models adapted from smaller aircraft.

Frantz Yvelin, CEO of boutique airline La Compagnie and a Boeing 757 operator, told Business Insider earlier this year that he believed Boeing made a "major mistake" when it put the plane out to pasture.

Boeing's problems are compounded by the fact that the Airbus A321neo has outsold the 737MAX9 five-to-one. Although the company does not publicly break down the sales of the individual MAX variants, data from Flightglobal indicates that Boeing has sold only 224 MAX9s. According to Airbus, it has 1,117 orders for the rival A321neo.

As a result, Boeing is looking to close the performance and sales gap between its MAX9 and the Airbus by stretching the 737's airframe and bolting on larger engines.

According to Reuters, Boeing is considering a plan to stretch the MAX9's airframe so that its maximum seating capacity can match that of the A321neo's 240 seats.

To compensate for the larger airframe, Boeing is reportedly planning to replace the plane's CFM LEAP 1B engines with the A321neo's more powerful LEAP 1A engines.

Because there is a direct correlation between the diameter of a turbofan engine's fan blades and the amount of thrust the engine can produce, the more powerful 1A engine's fan blades have a diameter of 78 inches - nine more than the 1B.

Thus, this move will likely involve a redesign of the 737's land gear. That's because the 737 was designed in the 1960s to be powered by Pratt & Whitney's JT8D engine with a much more compact fan diameter of 49 inches.

Since then, Boeing has been bolting on larger and larger engines on the 737, but the under-wing space has not changed. The 737 has essentially maxed out on the size of engine that can fit under its wings. As a result, Boeing will have to raise and relocate the plane's land gear.

Industry experts believe the modification will likely cost Boeing up to $2 billion, according to Reuters

As steep as this price tag may be for Boeing, it is likely to be much less steep than building an all-new 757 replacement from scratch.