By Dan Catchpole

(Reuters) -Boeing is "pretty confident" that it can increase production of its best-selling 737 MAX jets to 42 a month, Chief Executive Kelly Ortberg said on Thursday.

The U.S. planemaker's share price jumped 5% after Ortberg said at the Bernstein Strategic Decisions conference that he hoped to have production at 47 a month by the end of 2025. He later corrected this to say he expects the company to be working with regulators by the end of the year on increasing the rate to that level, not to reach it.

Boeing is currently trying to stabilize production at 38 per month, where it was capped by the U.S. Federal Aviation Administration in 2024 after a midair accident put the planemaker's safety and production quality program under new scrutiny.

After the FAA approves Boeing increasing output to 42 a month, "we do have subsequent rate increases in our plan," which will typically be in increments of five aircraft a month and at least six months apart, he said.

Ortberg has previously stressed that production must be stable before any rate increase.

Production defects on the 737 program are down by 30%, Ortberg said. "Virtually every one of our customers is reporting a higher quality of airplane at delivery."

Increasing production is critical in getting Boeing back to being cash positive, which Ortberg has previously said he expects to achieve in the second half of the year. The company burned through $2.3 billion in cash during the first quarter.

"I think the financial performance will follow the production performance ... and I think we need to think about it that way," Ortberg said.

CRITICAL TESTING

The company is making progress on certifying the smallest and largest MAX variants with the FAA, he said.

The MAX 7 and MAX 10 have been delayed in part due to concerns with the engine de-icing system. The company should finish critical testing of its fix by July, allowing time to certify the aircraft by the end of the year, he said.

Boeing's backlog includes nearly 1,200 orders for the 737 MAX 10 and 332 orders for the MAX 7.

Ortberg also said that Chinese airlines are set to resume taking deliveries of Boeing aircraft in June. China had stopped taking deliveries in April in retaliation to tariffs imposed by President Donald Trump.

Boeing expects the impact of the tariffs to be less than $500 million, though it hasn't specified if this would be on sales or profit. Most of that impact will come from tariffs Boeing will have to pay for foreign-made components, installed on planes delivered to U.S.-based airlines and lessors, Ortberg said.