Boeing plans to ramp up production of 777s, 747s

By Michelle Dunlop Herald Writer

EVERETT — The Boeing Co. plans to increase the production rate for its 777 and 747 airplanes, both built in Everett, to meet customer demand, the company said Friday.

“Market improvement and our conservatively managed approach to production have put us in a position where we see it necessary to raise aircraft output,” said Jim Albaugh, president of Boeing Commercial Airplanes. “Increasing our rate is the right thing to do to support our customers.”

Production rate increases could mean more jobs at the Everett factory and for suppliers in Snohomish County. Last year, amid a severe downturn in air traffic, Boeing had announced a production rate reduction for the 777 line, which starts in June. Boeing also planned to cut 6 percent of its work force companywide.

Asian and Latin American carriers have led the way for a surprisingly strong recovery, while improvement at U.S. carriers has lagged. The industry’s leading trade group, the International Air Transport Association, cut its 2010 loss forecast in half for global airlines to $2.8 billion. The group also lowered its 2009 loss estimate to $9.4 billion from $11 billion because of the year-end rally.

Many airlines across the globe reported losses in 2009 as travel demand slumped. Boeing, the world’s second-largest aircraft maker behind Airbus, said Friday that it sees the airline industry recovering this year, followed by a return to profitability in 2011. That should lead to demand for new aircraft in 2012 and beyond, the company said.

Boeing will begin producing seven 777s monthly in mid-2011. It builds five of the twin-aisle jets monthly now and had planned to increase that in 2012. The company introduced its new 777 Freighter last year and has 272 unfilled orders for passenger and freighters in its backlog.

The company will increase the rate of the 747-8 to two airplanes monthly in mid-2012, an increase from 1.5 airplanes monthly initially planned for 2013. Boeing flew its updated 747-8 for the first time earlier this year and plans to deliver the freighter later this year. The revamped passenger jumbo jet is due out next year. Boeing has 108 unfilled orders for its new 747-8 jet.

Boeing said it has given its suppliers adequate notice for the rate increases. “We see 2010 as the year of overall economic recovery within the industry and 2011 a year where airlines return to profitability,” said Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes. “As a result, we anticipate an increase in demand for airplanes in 2012 and beyond.”

Boeing shares closed up 21 cents Friday to $71.08.

The Associated Press contributed to this report.