Optimism grows on airliner build rate
By Frank Haflich
Published: March 11, 2010
Optimism is building in the commercial aerospace sector as the world's two largest airliner manufacturers said this week they are either increasing production rates or seriously considering such a move.
Airbus SAS said that starting in December it will raise the build rate on its A320 family of planes to 36 per month from 34 currently.
"Leading economic and business confidence indicators are showing an upward trend again," said Tom Williams, executive president of programs for the Toulouse, France-based European aircraft consortium.
A little more than a year ago, a declining outlook led Airbus to say it would cut the monthly build rate on the single-aisle A320 to 34 from 36 by October 2009, and it froze production rates on the A330/A340 family of planes at 8.5 per month instead of implementing a planned boost.
Meanwhile, Boeing Co.'s top commercial transport executive said the company is seriously contemplating raising production on its two leading existing programs. Jim Albaugh, chief executive officer of the Chicago-based company's Boeing Commercial Airplane (BCA) subsidiary, told a meeting of industry securities analysts in New York that he will decide next month whether to increase output of the 777 airliner and "sometime this summer" on increasing the rate on the company's venerable 737 single-aisle airliner.
"We think we're coming back into a positive cycle in the marketplace," he said.
Boeing said slightly less than a year ago that it would cut 777 production in mid-2010 to five planes per month from seven.
Albaugh didn't cite the potential increase for the 737, whose current build rate of 31.5 planes per month is the highest of any Boeing program. But sources in the aerospace supply chain who were contacted by Boeing recently as part of a rate study conducted by the plane builder said speculation is for an increase to about 34 planes per month.
"We're taking a hard look at what we want to do with the rate" on the 737, Albaugh told the analysts, noting that Boeing is "sold out" for 2011 and is already "overcommitted" for 2012.
A decision in April to raise production of the 777 would impact the production rate in 2011, Albaugh said. While he stressed that Boeing needs to feel "very, very confident" that it could maintain the rate at six or seven planes per month "for years to come," BCA anticipates "a couple of orders in the near term" for that plane.