Back in February, when Boeing CEO Jim McNerney surprised everyone with his “bias” for a new version of the 737, more than a few people said it didn’t pencil out, Boeing was bluffing to steal some Airbus 320neo thunder, and would have to re-engine.

This week, the Seattle Times‘ Dominic Gates reported on Boeing’s “striking turnaround” to win back long-time Boeing buyer American Airlines from making an all-Airbus order:

Before anyone at Boeing knew about it, last month the airline signed an initial memorandum of understanding to buy A320neos, which will come with new fuel-efficient engines.

To head off that loss, within the last 10 days Boeing gave American a new proposal that offers the 737 jet equipped with similar engines, the sources said.

At the time the deal was announced, American said that orders with both companies were necessary because neither could provide the number of jets the company needed. Boeing would supply 200 narrowbodies: 100 Next Generation 737s and 100 of a new, re-engined 737, powered by CFM International’s LEAP-X engine.

Airbus would provide 260 of its A320s. Gates quotes the reaction of John Leahy, head of sales at Airbus: “If we had sold American 26 aircraft, it would have been a victory for Airbus because it broke Boeing’s 15-year monopoly.”

At Forbes, eyebrows are lifted at Boeing’s fire drill: “The re-engined 737 has not even been approved by the Boeing board,” complains RBC analyst Robert Stallard. (Directors will vote on the decision this August.)

Boeing, sounding a little like that British sketch about “the colonies we’ve still got,” listed the other American orders in the works:

The agreement builds on American Airlines’ existing backlog of 64 Boeing airplanes consisting of 51 737-800s, seven 777-200ERs (extended range) and six 777-300ERs. In addition, American Airlines has an existing purchase agreement with Boeing to acquire an initial 42 787-9 Dreamliners, with the right to purchase up to 58 additional 787s.

If the exact circumstances are embarrassing for Boeing, it’s more worrisome to hear Boeing Commercial Airplanes head Jim Albaugh admit that, internally, Boeing could not come up with a way to produce a new plane with sufficient speed: 40 to 60 per month. Their customers, waiting on 787s and 747-8s, can be forgiven a little concern over whether Boeing still knows how to ship a new plane on time and on budget.

You hear a little of that in Alaska Air CEO Bill Ayer’s phrasing when he says of the re-engined 737, “If Boeing can do this sooner rather than later this is a good thing.” If.

“Our customers wanted more efficiency now and certainty of delivery. We know we’ve made the right decision,” said Albaugh. It probably is, it’s just “regrettable that it took an established Boeing customer to convince them that a response to the neo was needed in the near term,” Michel Merluzeau of G2 Solutions told Bloomberg. Fuel costs are killing airlines‘ profits, and you don’t need to be a rocket scientist to know that an engine is one of the major fuel-devouring parts of an aircraft.

Still, first things first. Boeing’s immediate goal is to clear a 7-year backlog of 737 orders, hopefully finishing up in time for the re-engined model to take off from airports near you around 2018. “The 737 program currently produces 31.5 airplanes per month and expects to go to 35 per month in early 2012, 38 per month in second quarter 2013 and then to 42 per month in the first half of 2014,” says Boeing.

Accomplishing that goal will do a lot to reassure buyers that Boeing’s 787 debacle wasn’t a sign of an organization that has completely lost its way. (Cue the McDonnell-Douglas haters.)