Boeing says it is planning to ramp up production rates on the 737 from 31.5 aircraft per month to 34 to satisfy what it describes as “strong demand.”

The rate increase decision, expected since March, will be in place by early 2012 with a gradual spooling-up of production through late 2010 and 2011. In a statement, Boeing Commercial Airplanes President Jim Albaugh says, “Even through the global economic downturn, our diverse 737 backlog has remained very strong. Increasing the 737 production rate is the right thing to do to meet the growth and fleet replacement needs of our customers.”

Boeing’s decision follows the recent announcement by Airbus Chief Operating Officer-Customers John Leahy that the airframer may step up production of the competing Airbus A320 to as many as 38 per month. Earlier in the year, Airbus said it would boost A320 production from 34 to 36 in December. However, speaking in the U.K. on May 11, Leahy said, "We’re looking at if we can move it to 38 per month. There’s been no commitment yet, but if I had to bet, then the next step is up.”

Boeing Commercial Airplanes VP-Marketing Randy Tinseth adds, “The global economy continues to recover this year, and we believe that airlines will return to profitability in 2011. We believe that there will be an increased demand for airplanes — especially in the market served by the Next-Generation 737 — in 2012 and beyond.”

Boeing currently holds 2,028 unfilled 737 orders in its backlog, including orders for 70 additional 737s taken so far in 2010.

Photo credit: Boeing