By Dan Catchpole and Shivansh Tiwary

May 27 (Reuters) – Boeing is increasing 737 production to 47 jets a month, up from 42, after consulting with the Federal Aviation Administration, Boeing CEO Kelly Ortberg said on Wednesday.

“We’re off and rolling at the 47 rate, and we ‌should be there in the next couple months,” Ortberg said at the Bernstein Annual Strategic Decisions Conference.

The company aims to move to 52 jets a ‌month early next year, after opening a fourth 737 production line in Everett, Washington.

“I think the whole world’s watching to make sure we make (rate) 47 and 52,” Ortberg said.

A midair panel blowout ​on a nearly new 737 MAX in January 2024 revealed significant production quality problems at the U.S. planemaker and brought intense scrutiny from customers and the FAA, which capped 737 output at 38 a month. It removed the cap in October.

INCREASING PRODUCTION KEY AFTER LOSSES

Increasing 737 output is critical to Boeing’s ongoing turnaround after years of crises that resulted in more than $35 billion in losses from 2019 to 2024. Last year, the company turned a $2.2 billion profit thanks to the $10.6 billion sale of subsidiary ‌Jeppesen, a digital aviation services provider, according to the ⁠company’s financial filings.

Boeing’s shares rose about 4% in morning trading on Wednesday before settling back around the opening price.

Ortberg said Boeing has largely completed certification flight tests for the MAX 7 and 10, the narrowbody jet’s smallest and largest variants. Certifying the ⁠two models and Boeing’s new widebody 777-9 has taken several years longer than expected and been a significant drag on Boeing’s earnings.

He said he is “pretty confident that we’re not going to see any hiccups in the remaining phase of flight testing” for certifying the new 737 MAX engine anti-ice system.

“The one area I guess I’d highlight where I ​haven’t ​met my goals was getting the certifications complete on the new commercial airplanes” sooner, he ​said.

Production of Boeing’s twin-aisle 787 is back at eight a month ‌after dipping earlier this year due to delays with engines from GE Aerospace. Certification problems with new premium seats have slowed deliveries of completed 787s, too. Boeing still hopes to raise output to 10 per month later this year, as long as engine deliveries can keep up, Ortberg said.

The planemaker has not had customers ask to delay jetliner deliveries due to the Iran War and higher fuel prices. Instead, many customers have said they will take deliveries earlier if possible, Ortberg said.

CHINA COMMITTED TO FUTURE ORDER

China committed to a future order of 200 Boeing jets earlier this month, during President Donald Trump’s summit with Chinese leader Xi Jinping. ‌It was Boeing’s first large commitment from China in nearly a decade. Investors, though, had ​expected a larger order, and Boeing’s share price traded down after the announcement.

“I think people ​focus a little bit too much on the initial quantity,” Ortberg said ​on Wednesday.

China needs hundreds of new aircraft a year to support its economic growth, and this initial commitment should be followed ‌by many more orders, he said.

WEAPONS DEMAND IS BOOMING

Demand for ​Boeing’s munitions “is through the roof,” Ortberg said, ​adding that the company is “talking about how many can we build, not how many can we get under order.”

The U.S. Air Force is “super pleased” with progress on the F-47 sixth-generation fighter jet program, which Boeing was awarded last year, he said, adding that Boeing is “really focused on doing things ​differently and having a successful development program.”

Over the past ‌decade, Boeing has had to take considerable charges on several fixed-price military aircraft development programs.

But the company is more disciplined on new contracts, ​Ortberg said. “In fact, we’ve walked away from some (fixed-price) jobs that we historically would have taken on.”

(Reporting by Dan Catchpole in Seattle and ​Shivansh Tiwary in Bengaluru. Editing by Chizu Nomiyama, Chiara Rodriquez and Mark Potter)