Industry wary of high jet production rate
Boeing, Airbus confident of accelerated schedule
PHOENIX – Boeing and Airbus are ratcheting up production of narrow-body aircraft to excessive and unsustainable rates, according to many industry insiders at an aircraft conference here.
Boeing decidedly doesn’t think so and is determined to build jets at full speed ahead.
The pessimistic view is held by many airplane buyers at the annual conference of the International Society of Aircraft Traders, which opened Monday.
“We are in a bubble,” Adam Pilarski, a respected industry analyst with consulting firm Avitas, told his audience of airplane lessors and financiers.
He said the announced production rates of 42 single-aisle jets per month from each plane-maker by 2014 would result in 5,000 more narrow-body jets being built over the next 20 years than the two companies’ own forecasts predict will be needed.
But he said in a later interview that Boeing’s plans to accelerate production make strategic sense. “You still want to enjoy it while it lasts. Why not? Eventually the bubble bursts – too bad. If I were Boeing or Airbus I’d do exactly the same thing.”
Yet Mike Bair, Boeing’s senior vice president of marketing, expressed total confidence that the market will absorb all the 737s Boeing can make – ensuring plenty of jobs in Renton, Wash.
The world has just gone through the second-worst economic downturn in the past century, yet “we motored right through it,” Bair said. Whatever the next cycle brings, “we’re confident we’ll motor through it” once again.
Bair cited the 787 Dreamliner program, saying that when airlines in some hard-hit parts of the world needed to defer orders, Boeing found plenty of takers to fill those slots.
Bair said only some big shock to the world economy could stall the momentum that has seen aviation booming, and Boeing hiring, right through the downturn since 2008.
“If we go into a real recession, it could be a problem,” Bair conceded. But he added that the diversity of demand globally will sustain the rates Boeing has projected.
“Unless it’s a disaster, we think we have enough levers to pull to keep us going,” Bair said. “We’d still be able to hold our rates for a period.”