Will low oil prices slow down Boeing, Airbus production?

RENTON, Wash. – Both Boeing and Airbus are riding high with airlines scrambling to order new fuel efficient jets. But could the drop in oil prices cause a slowdown?

Boeing's Renton factory only builds 737s and is running at a record rate of 42 airplanes per month. Boeing has announced plans to go to 52 each month. Currently the factory is being set up to build the new, even more fuel efficient 737 MAX.

The Boeing 787 Dreamliner was designed with 20% fuel savings in mind, and airline executives have been buying.

But the days of $100 a barrel and up oil are over - for now. This week the price hit the mid $50s. Does that mean assembly lines will slow down? Boeing doesn't think so.

"We know there is volatility in the market." said Darren Hulst, Boeing's director for market analysis. The group every year prepares a 20-year forecast looking at the future demand for air travel and jets, called the Current Market Outlook.

Buying airliners is a long term commitment. With order books sold out, it can take up to eight years to get a new jet from Boeing. It's hard to tell what oil prices will be then.

"We're sold out on many of our production lines for multiple years. So I don't think you make a long term decision on a short term trend like the price of fuel," said Hulst.

"I don't think that anyone is in the position right now to think that oil is going to stay at $40 to $50 a barrel permanently," said Bob Toomey, vice president of research at S.R. Schill & Associates. "We believe that it may hang down around here for a while, potentially as long as a year or so, but we believe the long term price of oil is maybe in the $80 to $100 range."

Boeing isn't just selling fuel efficiency. Newer jets are cheaper to maintain, have fewer breakdowns at the gate and higher reliability.

Beyond fuel, the world is simply demanding more opportunities to fly, and that means more planes need to be built.

"About 100 million new passengers every year are generated just in the Asia-Pacific market alone," said Boeing's Hulst. "That growth is irrespective of fuel price."

Eighty percent of Boeing's jets are exported.