Boeing expects 737 production to rise beyond forecasts


Boeing Co said on Thursday it settled on a "firm concept" for its new 737 MAX jet, and chose Honeywell International Inc and Rockwell Collins Inc to supply new systems for the new plane.

The Chicago-based company also said it expected to see further increases in production rates for the single-aisle 737, its best-selling jet.

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Boeing said it has decided on a "firm concept," finalizing some basic design parameters for the 737 MAX and expects it to use 13 percent less fuel, compared to the current 737s. The plane would include new LEAP-1B engines from CFM International, which combines resources from Snecma, a unit of the Safran Group of France, and General Electric Co.

Honeywell was chosen to supply an electronic air-bleed system and Rockwell Collins will provide large-format panel displays for the flight deck of the new plane.

Boeing said the 737 MAX remains on track for first delivery in 2017.

Boeing is currently producing 35 737 jets a month. The company said it likely would increase its production rate beyond its current forecast, which calls for 38 a month in the second quarter of 2013, and 42 a month starting in the second quarter of 2014.

The company is currently building a third production line at its factory in Renton, Washington, to accommodate the 737 MAX, which will enter production in 2015.

"Eventually, we'll use the third line for future rate increases," Beverly Wyse, vice president and general manager of the 737 program, said on a conference call with reporters.

She said Boeing officials "expect to see significant growth" in orders for single-aisle planes. "We don't have any specific plans when that next rate increase will be, but we're pretty sure it's coming."

Boeing shares rose 0.2 percent to $71.42 in late-morning trade.