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Introduction

Jan. 27, 2016, © Leeham Co. As Airbus prepares to hike production rates of the A320 family to 60/mo by the end of the decade and Boeing mulls whether to boost 737 rates above the announced 57/mo announced today, some question whether the companies should do so.

The questions become more frequent as falling fuel prices make the need for the fuel efficient A320neo and 737 MAX appear to be less compelling. The economic turmoil in China adds to uncertainties.

Today we take a look at the 737 order book, based on Dec. 31 data, and extrapolate this to announced and potential future production rate hikes, and draw conclusions whether the rates announced and those under study make sense.

We will look at the A320 backlog in a future post.

Summary

• Looking at firm orders only with actual delivery dates shows minor production gaps.
• Large MAX TBD, unidentified customers make drawing firm conclusions difficult.
• Options and LOIs from solid customers show some years oversold.