Boeing ups 737 production rate

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Boeing will further increase 737 output to 38 aircraft per month as it declares confidence in its supply chain to handle record production rates for the venerable narrowbody.

The airframer says it will achieve its incremental ramp up from 31.5 aircraft per month today to 35 aircraft by early 2012 followed by a further boost to 38 in the second quarter of 2013.

"Increasing production is in response to customer demand for this airplane," says Boeing Commercial Airplanes president and CEO, Jim Albaugh. "We made this decision after careful evaluation by Boeing and our supplier partners."

The 20% increase in production comes after an evaluation of the supporting supply chain and its ability to handle record production rates beyond today's 31.5 per month.

While the aircraft goes through final assembly at the company's Renton, Washington facility, the majority of structural production takes place at supply partner Spirit AeroSystems in Wichita, Kansas.

Boeing says "key factors" driving the increase include the more than 2,000 737s in the backlog, options that customers are expected to exercise and ongoing sales campaigns.

The move to further increase output to 38 aircraft per month comes as Boeing is nearing a final decision on whether or not to re-engine, replace or do nothing to its highest volume product.

The airframer is believed to be moving away from re-engining the 737, as it evaluates further enhancements to it's existing line. That product, dubbed the 737NG+, would further build on the 2% fuel burn upgrade package set to enter service in early 2012 with aerodynamic improvements and the upgraded CFM56-7BE engine.

Additionally, Boeing will deliver its first 737 with new 787-inspired Sky Interior to FlyDubai in late October. Delivery will be followed by in-flight entertainment system installation by the carrier.

Boeing says the first five customers will receive 737's with the Sky Interior in 2010. The company has signed up nearly 40 airlines for the new cabin, though the overwhelming majority of customers have not yet been disclosed.