* Talks at preliminary stage, would set new output record
* Move would push narrowbody production above 80 a month
* Planemakers aim to meet new demand, head off competition
* Planning complicates jigsaw for Airbus upgrade decision
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By Tim Hepher
PARIS, Nov 26 (Reuters) - Airbus and Boeing have begun sounding out suppliers on their ability to cope with further production increases of their most popular jets, taking combined output well above 80 a month within four to five years.
Three senior industry sources told Reuters consultations had started on a historic upswing which could see Airbus producing as many as 44 A320 single-aisle planes by 2014 or 2015 and its rival simultaneously rising to as many as 42 737s a month.
Despite a sluggish U.S. economy and a debt crisis in Europe, demand for narrowbody jets is increasing as lessors backed by banks bet on aviation and Asian carriers expand to tap growth.
"Going to 42 or 44 is something people are being asked about. It is a discussion we are having," said a top executive at a supplier to both leading planemakers.
Another said Airbus and Boeing were exploring whether to create new production slots for such models, which are sold out until 2015. The aim is to be ready for a stronger-than-expected recovery and gain the flexibility to counter new competition.
However, the increase in demand for existing models complicates the jigsaw for Airbus as it ponders plans to upgrade the A320 family with new engines. A decision to go ahead with the carefully balanced market gamble is expected by end-year.
Boeing and Airbus suffered a slump in orders in 2008 and 2009 amid the recession. Now, demand is reviving as air traffic trends recover and funds flow back into the leasing market.
Airbus is about to increase output of A320-family jets to 36 and has targeted a record 40 planes a month in 2012.
"From this plateau we will study our options, market and resources permitting," Airbus spokesman Stefan Schaffrath said, adding he would not comment on talks with suppliers.
NEW CHALLENGERS
Boeing said in September it would boost 737 production to 38 a month in the second quarter of 2013. "We regularly review our production rates to gauge what rates would best serve the needs of our customers, help us respond to the continued high demand for the Next Generation 737, and also be sustainable by Boeing and non-Boeing suppliers," said Jim Proulx at the U.S. planemaker.
"That said, we don't comment on any discussions we might have with suppliers," he added.
Supplier talks are at an early stage, the sources said, but they give a glimpse of the weight placed by both builders on the least publicised but most cash-generating part of their fleets.
Narrowbody planes, which carry up to 200 passengers about 3,000 miles (5,700 km), are the workhorse of the air industry.
Demand for such planes is seen as an economic bellwether in emerging markets where transport expands early to fuel growth.
Airbus and Boeing have a colossal backlog of some 4,400 narrowbody planes worth a total $350 billion at list prices.
But new challengers are chipping away at the duopoly as Canada's Bombardier expands from regional and business jets to offer airlines its new 110-145-seat CSeries.
China last week announced initial orders for its first viable passenger jet, the 150-seat C919, which it hopes to deliver in 2016 but which most analysts expect nearer to 2020.
An upswing would test supply chains as never before but despite high-profile problems on large planes, Airbus and Boeing have so far seen few problems on smaller, standardised jets.
"The producton chain for single-aisle is well established and incredibly robust. Whatever they have said they wanted to do they have just done," the head of another leading supplier said.
A full single-aisle plane takes some 30 days to assemble, with a lead time of six months for the biggest parts.
Airbus last year began assembling some A320 aircraft in Tianjin, China, in a bid to catch up with Boeing in the world's fastest-growing plane market by serving local airlines. Most production remains in Toulouse, France, or Hamburg, Germany.
Airbus's Chinese plant would not likely add output if the planemaker decided to take another leap forward in production.
The European group's agreement with a local joint-venture partner caps production for the Chinese market from the plant at four planes a month, which it plans to reach in about a year.
Each jet currently takes three months to assemble there and has an extra month's lead time due to the shipping of parts, factory managers told Reuters on a recent site visit.
The factory has reached output of three planes a month.
The Boeing 737 is built in Renton, Washington. (Additional reporting by Kyle Peterson; Editing by James Regan and Jane Merriman)