Boeing slows large aircraft production
Boeing said last Thursday it will slow down production of widebody aircraft in the face of falling demand from airlines body-slammed by the global recession.
Poor economic conditions have reduced demand for passenger and cargo transport, made it difficult to finance purchases of large assets and led to billions of dollars in losses for the aviation industry.
Boeing said it will reduce production of its 777 from seven to five planes per month beginning in June 2010 and delay plans for a modest increase in production levels for the 747-8 and 767 jetliners.
The Chicago-headquartered airplane manufacturer said it expects a profit cut in the first quarter of 38 cents per share because of the production decision and the fact it can no longer raise prices on previously ordered planes under certain triggers.
'These are extremely difficult times for our customers,' Boeing Commercial Airplanes President Scott Carson said in a statement. 'It's necessary to adjust our production plans to align supply with these tough market conditions. We are in close contact with our customers as we continue to monitor this dynamic business environment.'
Boeing stressed that the decision to slow the rate of production only involves delivery deferrals requested by passenger and cargo airlines faced with a serious slump in volumes. No 767, 747 or 777 orders have been cancelled this year, it said.