- Boeing (NYSE:BA) is finding it hard to meet demand for its 737 aircraft; it now makes 42 each month, it has announced plans to increase production to 47 by 2017, and analysts expect it to announce plans to boost capacity further - but should it?
- Airbus (OTCPK:EADSF, OTCPK:EADSY) is scheduled to deliver its first re-engined A320neo competitor to the 737 early in 2015, and Boeing may have to increase the build rate of its existing 737 just to keep up.
- "The real problem is long-term," says Teal Group analyst Richard Aboulafia, noting the record-high output for single-aisle airplanes over several years, with no slowdown until both the A320neo and 737 MAX are in production - "a recipe for overcapacity by the end of the decade.”
- Canaccord Genuity seconds the concerns, noting that as a general rule of thumb, many suppliers cite 100/month combined for both Boeing and Airbus as a natural limit and are concerned that anything more is unsustainable for more than a short time.