Boeing Co plans to increase the production rate on its hot-selling 737 narrowbody plane to 42 per month, starting in 2014, the company said on Wednesday.
The world’s second-largest plane-maker after EADS unit Airbus produces 31 1/2 737 airplanes per month and expects to increase to 35 per month in early 2012, 38 per month in the second quarter of 2013 and then 42 per month in the first half of 2014.
Boeing has 2,101 unfilled orders for 737 models, according to its website. The company has taken a net total of 65 orders for the plane this year.
Boeing is deciding whether to redesign its 737 or put a more fuel-efficient engine in the current design. A redesign would take longer but would save more fuel for budget-conscious airlines.
Airbus has said it would put a new engine in its competing A320 narrow-body. Airbus expects its sales to be boosted by the planned revamp.
In May, the European plane-maker said it will increase production of its best-selling A320 family of aircraft to a record 42 planes a month, underlining signs of a global economic recovery.
Commercial aircraft demand is picking up as air travel recovers and funds return to the leasing market. Soaring oil prices, meanwhile, are forcing airlines to renew fleets with more fuel-efficient planes.
The Airbus A320 competes with Boeing’s 737 for sales estimated at $1.7 trillion over the next 20 years.
The two competing 100-200 seat aircraft are the backbone of most airlines’ medium-haul fleets and are credited with powering the dramatic growth of low-cost carriers.
“We see this as a positive development for Boeing and the aerospace supply chain. A potential 737 rate increase has been widely discussed, but we had expected an announcement on 737 rates to occur later this year,” said RBC Capital Markets analyst Robert Stallard said in a research note.
“The earlier-than-anticipated decision would imply continued robust airline demand for the plane, but also Boeing’s ability to reassure suppliers that this is a realistic, achievable and sustainable rate increase,” Stallard said.
Boeing’s shares were down 19 cents at $74.45 in midday trading.
