Boeing feels strong pressure to increase 737 jet output

Mon Sep 8, 2014 3:59pm EDT
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By Alwyn Scott

NEW YORK (Reuters) - Ray Conner, chief executive of Boeing Co's (BA.N: Quote) commercial airplanes business, said on Monday the planemaker is being pressured to raise the production rate of its 737 jetliner, another signal the company is about to announce rate increases beyond current targets.

"There's incredible pressure to go higher," Conner said at a news conference in New York to announce the $11 billion sale of 737 MAX planes to Irish low-cost carrier Ryanair Holdings Plc (RYA.I: Quote), starting in 2019.

"We still see tremendous demand across the board, way beyond 47 a month," Conner said, referring to Boeing's target to produce 47 737s a month, starting in 2017.

Boeing currently produces 42 737s a month at its factory in Renton, Washington, using fuselage sections produced by Spirit Aerosystems Holdings Inc (SPR.N: Quote) in Wichita, Kansas.

Conner said there is capacity at Spirit to go beyond 47 a month.

The 737 competes with the Airbus Group SA (AIR.PA: Quote) A320 family of single-aisle airplanes.

In August, Boeing Chief Financial Officer Greg Smith signaled that Boeing was close to deciding whether to push 737 production to 52 a month.

Increasing the production rate is a benefit to Boeing and to carriers since it allows the planemaker to offer airlines the chance to buy planes sooner, rather than putting their orders at the end of its record order book.   Continued...

A Boeing 737 jetliner is pictured during a tour of the Boeing 737 assembly plant in Renton, Washington February 4, 2014. REUTERS/David Ryder