LONDON—Boeing Co. will offer a modified version of its 737, increasing the capacity of the jet to up to 200 seats as the company chases demand from low-cost carriers, Boeing's commercial unit chief executive announced today.

The company signaled its intent to move ahead with the model here Sunday during a media round table with Ray Conner, Boeing's vice chairman and commercial airplane unit chief executive officer ahead of the Farnborough air show, which begins July 14.

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