BOEING'S DECISION TO make further cuts in production rates for its 737 and 757 narrow bodies is being seen as a temporary measure until an anticipated recovery in 1997.

The company says that 737 production will be reduced from seven to five a month in April 1996, potentially taking the series down to its lowest for more than a decade. The monthly rate for 757s will also drop, from four to three, in mid-1996.

Boeing says that the cuts are being made despite an increase in airline ordering activity which will take another two years to feed through into an upswing in deliveries towards the end of 1997. So far this year, Boeing has taken orders for 147 aircraft, compared with 120 for the whole of 1994.

"We're upbeat about our medium- and long-term prospects, but we will continue to adjust production to meet our customers' short-term requirements," says Ron Woodard, Boeing Commercial Airplane Group president.

Woodard adds that Boeing's aggressive strategy to cut down cycle times has given the company the ability to start raising production rates "much more quickly than before", once the market turns up. Boeing is close to reducing cycle time from around 18 to ten months and hopes to achieve six to eight months for all models by 1998.

At the height of the delivery boom in the early 1990s, Boeing was producing 39.5 aircraft a month, including 21 737s. On the latest figures, overall production will be at the 19-aircraft mark.

The decline in narrow body production rates is being offset, however, by a recovery in more valuable wide body deliveries. Output of the 747-400, which has slumped from a high of five a month down to only two, is now due to rise to three a month in the third quarter of 1996.

A rapid gearing up in 777 production will also take up some of the slack. Deliveries are due to rise from 19 this year to around 30 in 1996. Production rates, conservatively pegged at three a month, are expected to rise to at least four a month in 1997, as plans accelerate for the high-gross-weight and stretch versions. Production rates for the 767 are expected to remain at 3.5 a month.

Source: Flight International