March 23, 2011 / 5:31 PM / 6 years ago

Boeing mulls another rise in 737 production rate

CHICAGO (Reuters) - Boeing Co (BA.N) is considering a boost in the production rate of its hot-selling 737 to 42 planes per month in 2013, beyond its latest target of 38, the company's chief financial officer said on Wednesday.

Speaking at a J.P. Morgan conference, James Bell said Boeing was looking at its production capacity and would also assess customers' fleet needs.

"We'll take all that into consideration and just see after we get to the 38 if 42 or beyond is appropriate," he said.

Boeing said in September it would increase production of the narrow-body plane to 38 per month in the second quarter of 2013.

Bell reiterated that Boeing was still deciding whether to redesign its 737 or put a new engine in the current model to deliver greater fuel efficiency. He said the company would make a decision this year.

Bell also said demand for wide-body models -- the 777 and the 747 -- was picking up. Boeing is flight-testing upgraded freighter and passenger versions of the 747 superjumbo.

Bell reiterated previous company comments that the long-delayed 787 Dreamliner was moving well through the final stages of testing before its delivery target this year.

The 787 is almost three years behind its original schedule, having been repeatedly delayed by labor problems and snags in the extensive global supply chain. Bell said Boeing still aims to ramp up production to 13 787s per month in 2013.

Boeing is the world's largest aerospace and defense company. Its business is split between defense and commercial airplanes, although its shares generally track the commercial side.

Bell predicted improvements in Boeing's balance sheet that could be signaled by raising the company's dividend, buying back shares, paying down debt and looking at possible merger opportunities.

Boeing last month won a $30 billion Pentagon order to build 179 U.S. Air Force refueling planes, outbidding rival EADS EAD.PA. Some experts -- and EADS -- have said Boeing may have priced its bid too aggressively and could have problems keeping the project profitable.

Bell defended the bid, saying it was aggressive but "very, very responsible." Boeing has not disclosed all the details of its proposal.

"At the end of the day, we have a huge responsibility to our shareholders to make sure we don't enter into deals that destroy value," he said.

Shares of Boeing were up 68 cents at $72.53 in afternoon trade on the New York Stock Exchange.

Reporting by Kyle Peterson; editing by John Wallace

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