Boeing Co on Wednesday said it would increase the production rate on its hot-selling 737 narrow-body to 42 per month, starting in 2014, due to strong demand.

Customers are demanding our Next-Generation 737 at an unprecedented rate, Jim Albaugh, chief executive of Boeing Commercial Airplanes said in a statement. New performance improvements and enhanced passenger comfort features have driven home the value equation for our customers.

The world's second-largest plane-maker after EADS unit Airbus currently produces some 31.5 737 airplanes per month and expects to increase to 35 per month in early 2012, 38 per month in the second quarter of 2013, and then 42 per month in the first half of 2014.

Boeing currently has 2,101 unfilled orders for 737 models, according to its website. The company has taken a net total of 65 orders for the plane this year.

Boeing is deciding whether to redesign its 737 or put a more fuel-efficient engine in the current design. A redesign would take longer but would save more fuel for budget-conscious airlines.

Airbus has said it would put a new engine in its competing A320 narrow-body. Airbus expects its sales to be boosted by the planned revamp.

Boeing's shares were up 60 cents at $75.25 in morning trading.

(Reporting by Kyle Peterson, editing by Gerald E. McCormick and Maureen Bavdek)