Boeing – ‘softness’ in widebody orders.
Boeing – ‘softness’ in widebody orders. Boeing will decide in the next couple of months whether to further cut back planned production of its large 777 jet and may also cancel a planned production increase for the 787 Dreamliner.
Citing “softness” in the widebody-jet market, Boeing Chief Financial Officer Greg Smith said Wednesday that the airplane manufacturer will decide in the next couple months whether to further cut back planned production of its large 777 jet.
Smith indicated that the dearth of widebody-jet sales may also mean Boeing won’t raise output of the 787 Dreamliner as high as planned.
Coming on the heels of last month’s signal that Boeing could shutter the 747 jumbo-jet assembly line, the latest wavering on production means Boeing’s Everett plant could lose substantial work that would trigger significant job cuts.
Boeing has already shed more than 3,500 jobs in Washington state so far this year, with more to come due to previously announced cost-cutting efforts.
Boeing has already committed to slowing production of the current 777 from today’s rate of 8.3 jets per month – that’s 100 per year – down to 7 jets per month in 2017. The rate will decrease further to 5.5 jets per month during the transition to the new model 777X in 2018.
Boeing has said it needs to sell 40 to 60 jets per year to fill all the open 777 delivery slots between now and the end of the decade. So far this year, it has booked just eight net new orders.
One indicator that the 777 market is in trouble came in a regulatory filing late last month by global aircraft lessor Intrepid Aviation.
Global aircraft lessor Intrepid Aviation, which has six 777s on order from Boeing, revealed it hasn’t yet found airlines to take four of those planes – three scheduled for delivery in fall next year and the fourth in early 2018.
On Wednesday, Boeing Chief Financial Officer Greg Smith also lowered expectations on production of the 787 Dreamliner.
Boeing is now producing 12 of the jets per month and planned to raise that to 14 per month by the end of the decade. Now that rate hike looks uncertain. So far this year, Boeing has added just 19 net new orders for the jet.
http://www.seattletimes.com/business/
(MIke Siegel/The Seattle Times)
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