Airbus, Boeing look at stepping up production

The world’s largest aircraft manufacturers have signalled a possible increase in output of their most popular passenger jets, highlighting their confidence about growth in demand for air travel.

Although new orders have dwindled following a sevenyear boom, executives at the Singapore Airshow suggested Airbus and Boeing had enough business in their bulging order books to speed up their already record production of narrowbody jets.

“The success of the product is forcing us to look at any opportunities we have to improve the rate,” Airbus sales chief Eric Schulz. “We have not come to any conclusion yet but this is something we are looking at very closely.”

Schulz, who has been recruited from Rolls-Royce to replace retired sales chief John Leahy, shrugged off concern about the ability of the supply chain to keep up with higher production rates.

“I think the supply chain will be able to cope and we will be able to raise rates as needed in the market,” he said.

His comments match confidence from rival Boeing as the industry responds to growing demand for medium-haul jets.

A senior Boeing official said the US company was confident in demand for its 737 MAX jet, the latest version of which was rolled out on Monday.

“There is upward pressure [on production rates] because we are oversold,” marketing vice-president Randy Tinseth said. “If you want a 737 MAX today, we are talking 2023,” he added, referring to long waiting times for new jets.

Just as airlines overbook seats, manufacturers typically sell more aircraft than they plan to produce to protect themselves from airlines going bankrupt or failing to take delivery. These comments show manufacturers are confident they can preserve an adequate buffer, even with higher output.

Engine maker CFM International, which supplies Boeing and Airbus, said in January that aircraft manufacturers had begun asking about its ability to support higher production.

Boeing produces 47 of its 737 narrow-body aircraft a month and is heading towards 57 a month in 2019.

Airbus is increasing its production to 60 a month by mid-2019.

Industry sources have said both companies are looking at increasing production to 70 single-aisle jets a month.

But the head of the world’s largest aircraft leasing company is yet to be convinced that markets can support such levels.

“Can both of them go to 70? I don’t think so — 140 a month, I don’t think that is possible at the moment,” AerCap CE Aengus Kelly said when asked whether the market could support such levels of production.

Even so, Kelly expected Airbus and Boeing, which make up the bulk of the $140bn-ayear jet market, to exercise restraint.