Boeing Increases Production and Predicts Boom in Demand

Southwest Airlines Boeing 737

Boeing poised to increase the output of its 737 model in 2012 - photo courtesy of and copyright Brandon Farris, Dex Images

In a surprising announcement given the recent economic woes of many US airlines, Boeing said that it plans several major production increases in the next few years. The company released an analysis directly before the Paris Air Show in June 2011 that predicted the world’s fleet of commercial aircraft would double in the next two decades. The aircraft manufacturer predicted a total of $4 trillion in commercial aircraft sales in that time, an increase of 33,500 new aircraft. Boeing cited, amongst other data, a 5.1% uptick in global passenger traffic and the declining age of commercial aircraft.

Due to this predicted increase in demand, Boeing has announced a production increase of 35 planes per month in early 2012 of its 737 model, which is currently being produced at a rate of 31.5 planes a month. Boeing further predicts that this number will rise to 42 per month by the beginning of 2014.

While some industry leaders have been skeptical of Boeing’s predictions, Boeing’s VP of Marketing Randy Tinseth contends that they are based on solid analysis of recent trends in the aviation market. “The world market has recovered and is now expanding at a significant rate,” Mr. Tinseth insisted, citing the growth of air travel in emerging markets and general economic trends in these markets towards open world trade, liberalization and general economic growth. Boeing admits that the US growth in air traffic will be much slower than that in developing economies, with North America’s increase in growth over the past year being a mere 2.3% compared to the robust 7% and 7.2% increases seen in the Middle East and the Asia Pacific regions respectively.

Due to this strong uptick in global growth, Boeing predicts that the most in-demand aircraft models in the next twenty years will be long-range twin-aisle designs that can handle the challenges of globalization and the corresponding increase in international passengers and flights.

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