The Boeing Company (NYSE:BA) has seen demands for its 737-family jets go up with the potential of overwhelming the company’s current production capacity and plans. The company will however not increase the production beyond their plans unless there is a very good reason to do so.
In an aviation conference in Istanbul, Boeing vice president of marketing at Boeing Commercial Airplanes, Randy Tinseth, said that the company will only increase its production of the jets based on sustainability.
The exec said that The Boeing Company (NYSE:BA) will only hike production if there increased demand and they have the capacity to deliver sustainably to that demand. In the company’s current plans, the production of the jets is to be increased by 12% in 2017.
“Today we are building 42 airplanes a month and plan to go to 47 in 2017. We see very strong demand after that; in fact we see upward pressure in rates,” said Tinseth.
In the said conference, many participants expressed their confidence, saying that air transport’s growth is upward. And there has been an increase in demand forcing many airlines to opt for the manufacture of aircrafts whose fuel consumption is highly economical.
A senior Airbus representative however questioned the viability of the decision by The Boeing Company (NYSE:BA) to increase production, terming it “Field of Dreams.” According to the representative, who is an Airbus executive, the idea of increasing production is simply a strategy to trigger higher sales, but not necessarily a market dictate.
“Running production up and chasing after orders and then doubling back down is not necessarily the right way to go,” Airbus chief salesman John Leahy said, pointing to a chart demonstrating greater historical production volatility at Boeing, which has been around longer.
Airbus and The Boeing Company (NYSE:BA) traded arguments with Airbus saying that it has maintained controlled production over the years and has been able to thrive through difficult crises while Boeing said that they act in response to the market forces and are less concerned about Europe’s policies.
This article has been written by Victor Ochieng.
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