Boeing may lift jet output in 2011

With signs that airplane orders are beginning to bounce back from last year's low, Boeing is weighing an increase in production rates next year for both its Renton-built 737 and Everett-built 777 jets.

It also plans to ramp up production of the new 787 Dreamliner, reaching a rate of five planes every two months by this August and 10 per month by 2013, the chief executive of Boeing's commercial-jet unit, Jim Albaugh, said Tuesday.

Speaking at a JPMorgan conference in New York, Albaugh also said the 787 dived at almost the speed of sound — Mach 0.97 — during a recent flutter test.

The jet is proving "as solid as a rock," he said, and will meet the performance guarantees promised to airlines when they ordered.

The possibility of raising production rates in 2011 is good news for the region, coming just ahead of a drop set in motion last year amid dire expectations for the industry.

Boeing plans to drop the 777 rate in June from seven planes a month to five, while the 737 rate is expected to hold steady through year-end.

The plane-maker must set production plans for its various jet programs six months to a year in advance so that its suppliers can produce the necessary components. Albaugh said Tuesday he'll decide next month whether the 777 rate for 2011 will be raised back to six or seven planes a month.

"We're looking very hard at a rate increase there," he said.

The optimism is based both on recovering traffic and new orders in the pipeline.

"We think the traffic will be at the 2008 levels this year, and we think it will continue to climb in 2011, and we think we'll see the airlines come back into the market in 2012," Albaugh said. "We anticipate to have a couple of orders in the near term on 777s."

On the 737 single-aisle jet program, Albaugh also forsees a need to gear up.

"Right now we're at 31.5 airplanes per month, and we will make a decision some time this summer about increasing that rate," Albaugh said. "We are sold out in 2011. We're overcommitted in 2012. We think we're coming back into a positive cycle in the marketplace."

Boeing's archrival, Airbus, said Tuesday it will accelerate production of its corresponding single-aisle plane. Airbus will raise production of its A320 jet in December to 36 a month, from 34 today.

Rate increases in Renton and Everett will help bolster employment at the plants, which according to state regulatory filings at the end of 2008 respectively employed 4,900 and 14,800 production workers.

The 787's anticipated 2013 pace of 10 planes per month would include three a month built in Charleston, S.C.

Reporting on progress with the 787, Albaugh said the jet is performing well in flight tests. A fourth test airplane will take to the sky Sunday, he said.

"We get more confident every day that we're going to be able to achieve the kind of guarantees that we gave our customer relative to the performance of the airplane," he said.

"We're about 40 percent through flutter tests, and the thing's solid as a rock," Albaugh said.

With more than a month buffer time in the 787 flight-test program to cover any contingencies, the new plane should be able to make its timetable for entry into service "later this fall," he said.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com