Tuesday, December 09, 2014

Boeing to Cut Production of Jumbo Jet: Aircraft Maker to Reduce 747-8 Deliveries to 1.3 a Month From 1.5 as Demand Slows

The Wall Street Journal

Updated Dec. 9, 2014 12:25 p.m. ET

Boeing Co. will reduce monthly production of its 747-8 jetliner to 1.3 aircraft a month from 1.5, as demand continues to slow for the storied jumbo jet.

The aerospace giant on Tuesday said it would make the reduction, which will lower annual deliveries of the 747 to approximately 16 from 18, in September 2015. The planned cut enables “us to continue to run a healthy business,” Boeing said.

The four-engine 747, with its distinctive hump, was long an icon of international jet travel, but demand has dwindled as airlines have opted for smaller, twin-engine jetliners and the need for big cargo freighters has ebbed. Boeing last year said it was cutting 747 output to 1.5 aircraft a month from 1.75.

The 747-8 version of the freighter, which Boeing first delivered in 2011, was intended to refresh the jumbo jet with a longer body, new General Electric Co. engines and a reshaped wing. A 747-8 passenger model, capable of holding 467 passengers, followed in early 2012 and is operated today by Deutsche Lufthansa AG and Air China Ltd. Both versions list for about $368 million, before discounts.

But Boeing this year hasn’t managed to grow sales of the 747-8, with two cancellations negating two new orders. The company has a remaining backlog of 39 aircraft through November, including 26 passenger and 13 freighter aircraft.

Boeing’s statement on Tuesday said it is “making this minor adjustment because the near-term recovery in the cargo market has not been as robust as expected” and it continues to believe in the “long-term strength of the freighter market.”

Source: http://www.wsj.com

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