Boeing to decide on 777 production ramp-up soon

NEW YORK, March 9, 2010 (AFP) - US aerospace giant Boeing said Tuesday it will decide whether to ramp up production on its 777 planes next month amid expectations of new orders for the twin-aisle airliner in the "near term."

"We're starting to see traffic come back," Jim Albaugh, president and chief executive of Boeing Commercial, said in a conference call with analysts.


"We anticipate to have a couple orders in the near term for the triple-7," he said.

With the airline industry pulling out of the downdraft from the global economic crisis, air traffic is likely to return to 2008 levels this year and continue to climb, he said.

"We think we'll see the airlines come back into the market in 2012," he said.

Albaugh said that if the 777 production announcement is made in April, it would take effect in 2011.

Boeing said in April last year that it would scale back the 777's rate of production to three planes per month, from the current five planes per month, beginning in June 2010.

The company's production rate announcement give suppliers a long lead time to make adjustments.

Albaugh said Boeing had roughly 4,250 plane orders since 2005 and currently has a backlog of 3,400 planes.

In 2009 the company had net orders of "only" 142 planes, compared with 1,400 in 2007.

"We see the cycle coming back... and we have people coming back into the market to buy this airplane."

Albaugh noted the 777 would face competition from a new plane from Boeing's European rival Airbus, the A350, but he said "you pick a day, a year" for its first delivery.

"We think we have a lot of good years of production on the 777-ER left," he said, referring to the 777 extended-range, or long-range, airplanes.

In France Tuesday, EADS, the parent of Airbus, reconfirmed its calendar for the first A350 delivery in July 2013.

Albaugh said that the new 787 Dreamliner has had more than 70 test flights since its first flight on December 15, with a fourth 787 plane set to make its maiden flight on Sunday.

Market demand continues to be strong for the fuel-efficient, next-generation plane, with 876 firm orders from 57 customers, he said.

Albaugh confirmed the first 787 delivery, to Japanese launch customer All Nippon Airways, in the fourth quarter this year.

Shares in Boeing gained 0.82 percent to close at 67.79 dollars in New York, according to final figures.


by Gavin Rabinowitz
(c) 2010 AFP