Boeing Says Strong Demand Pushing Commercial Production Rates Higher - Economic life of airplanes continues to hold steady
ORLANDO, Fla., March 11, 2013 /PRNewswire/ -- Boeing [NYSE: BA] said today that strong demand for its commercial airplanes and a healthy backlog are behind the company's decision to keep increasing production rates.
"The data tells us the market is strong and will continue to be strong. That's why we're confident as we raise our production rates," said Randy Tinseth, vice president of Marketing, Boeing Commercial Airplanes. "Supply and demand will continue to be in balance as we put more airplanes into the hands of our customers."
Tinseth spoke at the International Society of Transport Aircraft Trading (ISTAT) Americas conference in Orlando. He said passenger traffic is growing faster than capacity. Utilization rates and airline load factors are at historic levels. And Tinseth said airlines continue to replace their older, less fuel-efficient airplanes.
"All of these factors play into our decision to ramp up production in a methodical, deliberate way," said Tinseth. "We constantly pulse the market to make sure we're exactly where we need to be."
Boeing's 737 program is currently in the process of increasing its production rate to 38 airplanes per month and will go to 42 per month in the first half of 2014. The 777 program just ramped up production to a record high 8.3 airplanes per month (100 per year) and the 787 program plans to increase its current 5 per month rate to 10 per month by the end of this year.
Tinseth also said industry data shows the economic life of airplanes continues to hold steady.
"We've done an exhaustive analysis of the data. Everything tells us that airplanes are long-lived assets and continue to be good investments."
Certain statements in this report may be "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "intends," "plans," "projects," "believes," "estimates," "targets," "anticipates," and similar expressions are used to identify these forward-looking statements. Forward-looking statements are based upon assumptions about future events that may not prove to be accurate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak to events only as of the date they are made and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by federal securities laws. Specific factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to, statements we make regarding our guidance relating to future financial and operating performance, the effect of economic conditions in the United States and globally, and general industry conditions as they may impact us or our customers, as well as the other important factors disclosed previously and from time to time in our other filings with the Securities and Exchange Commission.
Photo and caption are available here: http://boeing.mediaroom.com