Boeing 737 production rate increases to 35 per month

Boeing (NYSE: BA) today announced a second production rate increase on the Next-Generation 737 program, taking the rate from the previously announced 34 airplanes per month to 35 in early 2012.

In May, Boeing cited continued strong demand for the Next-Generation 737 as reason to ramp-up production from 31.5 to 34 airplanes per month and indicated plans to study further increases. Today's announcement acknowledges the anticipated long-term growth in this market segment and the continued pressure to raise airplane output to match expected market demand.

"Our customers continue to show their preference for the Next-Generation 737 by exercising order options as well as by placing new orders," said Boeing Commercial Airplanes President and CEO Jim Albaugh. "We've managed our current backlog efficiently and increasing rate is the product of our comprehensive planning and preparation. We will continue to monitor demand as we go forward."

Boeing and its suppliers will prepare for the rate increase over the next 18 months, assessing readiness and ensuring an orderly ramp-up from the current 31.5 airplanes per month. The rate increase is not expected to have a material impact on 2010 financial results.

The Next-Generation 737 program continues to innovate in the areas of improved navigation, performance and passenger comfort. The program will deliver its first 737 Boeing Sky Interior in October and is progressing with its implementation of a package of performance improvements by early 2012 that are expected to reduce fuel consumption by 2 percent.