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Boeing sees potential for more 737 production rate hikes

Boeing is considering ramping up 737 production further in 2020 despite struggling with significant supply chain problems this year, Boeing chief executive Dennis Muilenburg says on 12 September.

Muilenburg also insists that Boeing is recovering from its current supply chain bottlenecks and predicts that 737 deliveries will accelerate in the remaining months of 2018.

"All of the market signals are telling us [the market] could support a production rate higher than 57 per month," says Muilenburg when asked about a possible 2020 production hike.

"We are taking a close look," he adds, citing growing worldwide demand for air travel. "It's pretty clear to me the opportunity is there."

Muilenburg made his comments during a Morgan Stanley investor conference.

Earlier this year, Boeing boosted 737 production from 47 to 52 aircraft monthly, and plans another hike to 57 aircraft monthly in 2019.

Supply chain problems, however, have slowed Boeing's deliveries, with the company handing over just 29 737s in July and 48 in August.

Muilenburg and others have attributed the slowdown to delays in the delivery of components from engine maker CFM International and fuselage manufacturer Spirit AeroSystems.

"There has been a bit of a challenge with some of our supply chain," Muilenburg says.

Production has been further complicated because the 737 line currently manufactures both 737NGs and 737 Max, Muilenburg adds.

However, he insists that Boeing is addressing the problems, noting the company has hired another 600 workers.

Boeing's 737 deliveries in September should be similar or "a little better" than August's 48-aircraft rate, and Boeing will hand over more than 52 aircraft monthly during the fourth quarter, Muilenburg predicts.

"Our recovery actions are taking hold and being effective," he says. "We are confident we can get our arms around it."

Boeing still expects to meet its goal of delivering a total of 810-815 commercial aircraft in 2018, Muilenburg says.

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