Friday, October 18, 2013

Boeing Plans Further Cut in 747 Jumbo Production: Plane Maker Also Is Working on Ways to Improve the Jet's Range, Fuel Efficiency

By Jon Ostrower

The Wall Street Journal

Updated Oct. 18, 2013 3:38 p.m. ET

Boeing Co. is working on improvements to boost the range and fuel efficiency of its revamped 747-8 jumbo jet in the wake of sluggish sales, according to two people familiar with the company's plans.

The company said Friday that it would trim production of the 747-8 to 1.5 a month early next year, having already delivered 56 of the 107 jets on order.

The so-called "Queen of the Skies" has fallen victim to airlines selecting less fuel-thirsty twin-engine jets such as Boeing's own 777 over larger four-engine aircraft; meanwhile, more air cargo is shifting to cheaper ocean-freight options.

Boeing previously had flagged plans to drop 747-8 output to 1.75 a month, from two, but the company remains optimistic it can capture more business.

The company is testing a package of improvements to the jet's General Electric Co. engines that would cut fuel consumption by 1.8%. That package will be introduced later this year and is expected to eliminate a performance shortfall that Boeing has been chipping away at since it delivered the first of the revamped jets in 2011.

It also is evaluating a host of other small improvements—an effort dubbed "Project Ozark"—to stretch the jet's range to 8,200 nautical miles, which are due around late 2015 or in early 2016. However, two people familiar with Boeing's planning say the company aims to boost the jet's range as far as 8,500 nautical miles to lure airlines requiring ultra long-range missions that last as long as 17 or 18 hours.

A Boeing spokesman said the company hasn't yet identified a specific date for its move to producing 1.5 747s per month.

The new rate will run through 2015 in a move that "aligns us with near-term demand while stabilizing our production flow," according to a statement from Eric Lindblad, vice president and general manager of the 747 program.

"Although we are making a small adjustment to our production rate, it doesn't change our confidence in the 747-8 or our commitment to the program," he added.

The plane maker has secured five orders so far this year for the jumbo, offset by five cancellations.

Boeing reports third-quarter earnings on Wednesday.


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