Boeing to revamp production

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The commercial aircraft manufacturer Boeing, announced its plan to boost the production of 737 to 42 single-aisles aircraft per month by the year 2014, which works out to 2 planes per workday.

Boeings increased production responds to general trends in the industry. According to Commercial airplanes president and CEO Jim Albaugh, there is constant demand from its customers for the Next Generation 737 at an unprecedented rate. The company already manufactures more 737s than any other plane, with a backlog of 2,101 orders.

At present Boeing produces an average of 31.5 airplanes per month. Under the new plan, production will increase to 35 per month in early 2012, 38 in the second quarter of 2013, and hit 42 in the first six months of 2014.

The company, however, did not make any mention of its ongoing labor disputes with the machinists union. The company is accused by the machinists union for the moving of its $1 billion plant from Washington to South Carolina. Litigation is pending with the National Labor Relations Board regarding this.

Boeing sold 8,888 planes of 737 as of last week. Boeing will decide whether to introduce new engines on the 737 or develop a new plane by 2020. Boeing also stated that its existing 737-800 with winglets will be cheaper to operate on a per-seat basis compared with A320neo.

Boeing has updated the 737 with a new interior, based on psychologists and architects inputs developed for the 787 Dreamliner. It includes bigger luggage bins and LED lighting. It also made minor changes to the engine and used smaller parts outside the plane to reduce fuel burn by 2 percent.

The stock price jumped after the announcement, reversing the losses, to $75.30.

Sources: Yahoo finance; Bloomberg; Reuters

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