Boeing increases 737 production rate

NEW YORK (Reuters) - Boeing Co (BA.N) said Tuesday it had increased the production rate for its next-generation 737 jetliner on schedule, aiming to turn out 38 planes a month, even as its larger 787 jet faces potential delays due to battery failures earlier this month.

Boeing said its 737 line will increase from the current 35 planes a month, with the first plane built under the higher rate due to be delivered in the second quarter. The rate is scheduled to increase to 42 a month in 2014.

Boeing is due to release fourth-quarter and full-year earnings on Wednesday, and while it likely finished the year with a solid performance, analysts are expected to focus on the potential cost of the 787 problems, which have prompted regulators to ground the plane worldwide.

The ramp-up in 737 production shows the company is continuing to produce its other planes on schedule. The 787 line also is on schedule, producing five planes a month, and plans call for the rate to rise to 10 a month this year. However, Boeing has stopped delivering the planes until problems that caused to batteries to burn on the planes are solved.

(Reporting by Alwyn Scott; Editing by Bob Burgdorfer)