November 7, 2015 / 9:40 AM / 2 years ago

Boeing eyes new partnerships

DUBAI (Reuters) - Boeing (BA.N) expects to announce new industrial partnerships with an emphasis on defense at the Dubai Airshow, expanding on tie-ups in commercial aerospace, executives said on Saturday.

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young

The U.S. planemaker signed a strategic agreement with Abu Dhabi state-owned investment fund Mubadala in 2009 and boosted it with a $2.5 billion composites production deal in 2013.

It has a similar strategic deal in place with India’s Tata Sons.

Gulf-based sources have told Reuters they expect Boeing to expand its ties with both companies at the Nov 8-12 air show.

“There will be a couple of announcements at the show related to increased partnerships and I’ll leave it at that,” Bernard Dunn, president of Boeing Middle East, North Africa and Turkey told a news conference, declining to elaborate.

Boeing predicts strong demand for commercial jets in the Middle East despite a slowdown expected at this year’s air show, following record orders at the last edition in 2013.

It expects the Middle East to require 3,180 new airplanes worth $730 billion over 20 years, about a third of which are already in the order books of Boeing and Airbus.

While production of some large jets is slowing, Boeing sees room to increase single-aisle jet production after Airbus (AIR.PA) recently announced a 20-percent increase in A320 production to 60 aircraft a month from 2019.

Boeing currently plans to raise output of its 737 model to 47 a month in 2017 and then 52 a month in 2018, compared with 42 now.

“It has been a very strong and resilient marketplace,” said Randy Tinseth, vice president of marketing at Boeing Commercial Airplanes.

“Is there a potential for our rates to go up? There is a potential if the market is there and we are assessing that.”

He declined to say when Boeing expected a decision, but added: “We have the capability to do more and we do see pressure upwards.”

Sales chief John Wojick said Boeing would only raise 737 output on the basis of orders from “strong creditworthy” airlines, an apparent attempt to defuse Airbus’s lead over Boeing in the latest order cycle for such jets.

Boeing supporters have questioned the quality of Airbus’s order backlog for the A320neo, compared with the competing 737 MAX, saying it relies too heavily on unproven airlines. Airbus insists its order pipeline is robust.

Wojick said he doubted that Boeing would decide to increase 737 output by 20 percent in one fell swoop.

Reporting by Tim Hepher, Nadia Saleem; Editing by Andrew Bolton

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