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Boeing to raise output of 737 jetliners

Staff writer |
Saying global demand for new aircraft justifies it, Boeing announced plans to raise output of 737 jetliners to 52 a month in 2018, from 42 currently, a record for the already blistering pace of production.

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The move, while widely expected, shows Boeing's confidence that its own factory and its network of parts suppliers can step up to the fastest-ever rate for Boeing's single-aisle jet.

After the increase, annual production of 737 aircraft is expected to rise to an all-time high of more than 620, Boeing said.

Boeing had already announced plans to raise monthly production of 737 jets to 47 in 2017, and had signalled for weeks that it was studying a further step up, citing "incredible pressure" from airlines, especially low-cost carriers, that are eager to refresh their fleets and expand amid rising air travel.

The planned increase counters concerns that Boeing would not be able to sustain the increase, and that its suppliers might balk at investing to increase capacity to meet that higher rate.

It also comes after Boeing announced on Monday plans to move about 2,000 jobs out of Washington state as it reorganizes its defence business in light of dwindling U.S. defence spending and other cost pressures, a move seen as a blow to the state's economy.

Boeing's study of the market convinced the Chicago-based company that demand is strong enough to justify the rate increase. Boeing has 4,008 orders for 737 models, including its new fuel-saving 737 MAX series, due to enter service in 2017.

That represents nearly eight years of production at the current rate of 42 a month. At the rate of 52 a month, the backlog would fall to 6.4 years, making it possible for Boeing to cut the amount of time airlines must wait for new planes.


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