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Boeing says airliner demand will be robust, but will new planes be built here?

Post by John Gillie / The News Tribune on June 11, 2013 at 1:09 pm with No Comments »
June 11, 2013 1:10 pm

Boeing’s new 20-year forecast predicts airlines worldwide will need some 35,000 new airliners in the next two decades as the world’s airline fleet more than doubles.

That forecast, rolled out Tuesday by Boeing marketing vice president Randy Tinseth, predicts demand will be particularly strong from Asian carriers and in the single-aidle segment of the business.

That forecast predicted the demand for new planes would be 1,000 more than the company had predicted last year. The value of those planes would be about $4.8 trillion,  some $300 billion more than last year’s forecast.

Tinseth said that demand is being driven by increasing affluence in Asia and other countries, by rising oil prices which power the demand for more efficient planes and rising passenger traffic.

Boeing this year has raised production rates on three of its most popular planes, the 737, 777 and 787.

The company is now producing 38 737s a month at its Renton plant with plans to increase that to 42 next year.  The company is also planning to push production of its composite-bodied 787 Dreamliner to 10 per month at its Everett and North Charleston, S.C. assembly lines, and it raised its 777 production pace to 8.3 planes a month at Everett.

While the demand for single-aisle planes such as the 737 is growing, Boeing said the demand for jumbo jets at the large end of the spectrum — planes such Boeing’s 747-8 and Airbus’ A380 — is weakening, the forecast said.

Single-aisle transports like the Boeing 737, Airbus A320 or Bombardier C-series will account for 24,670 orders valued at $2.3 trillion, the report predicted.  Smaller twin-aisle planes such as Boeing’s own 787  seating 200-300 passengers, will generate 4,530 orders valued at $1.1 trillion.  Larger twin-aisle, twin-engine widebodies seating 300-400 are expected to create sales of 3,300 aircraft  worth $1.1 trillion. Those larger twin-aisles are planes such as the Boeing 777 and Airbus A350.

While the Boeing forecast suggests demand will continue strong, it didn’t address how the planemakers will raise production to meet that demand.

Boeing in recent years opened its first assembly plant outside the Puget Sound area to build Dreamliners in South Carolina.  The company has told South Carolina legislators that its plans to spend more than $1 billion to build additional facilities there.

The company has talked about raising 737 production as high as 60 planes a month if demand merits it.  That would mean opening a third production line at Renton where all 737s are now built or creating another assembly plant for the popular jet elsewhere.

Boeing has yet to decide where it will build the updated version of the 777, now called the 777X.  All 777s are now built in Everett.

Boeing executives have expressed a desire to spread out production of its commercial planes to allow Boeing plants to compete against one another for work, to protect the company from the effects of a natural disaster.  From Boeing’s standpoint, building planes elsewhere, particularly in states where unions don’t have a strong influence, will give the company more leverage against the unions whose workers staff its Washington assembly plants.

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