Jumbo jet may be on its last legs as Boeing mulls end of the 747 era

Boeing could end production of its famous 747 aircraft, as the world’s biggest plane maker faces falling orders and pricing pressure, according to a regulatory filing.

“If we are unable to obtain sufficient orders and/or market, production and other risks cannot be mitigated, we could record additional losses that may be material, and it is reasonably possible that we could decide to end production of the 747,” Boeing said.

Boeing said it had cancelled plans to increase production of the 747 to one plane per month from 2019, and stuck to its plan of halving the production rate in September.

“On the 747 programme, we decided to reduce future production expectations and revenue assumptions to account for current and anticipated weakness in the air cargo market,” said the chief executive Dennis Muilenburg.

“Despite the ongoing challenges of the air cargo market, we continue to see the 747 as a unique and significant value creator for our customers over the long term,” Muilenburg said.

Boeing declined to elaborate on the filing or the comments.

The production rate of the 747, which was 1.5 per month in June 2015, dropped to one per month in this month.

The latest version of the 747 is used by Cathay Pacific, Lufthansa and Air China, among others.

Boeing is not alone in facing problems with sales of the biggest passenger jets – Europe’s Airbus has also been hit by weak demand.

Airbus confirmed last week that it plans to approximately halve production of its A380 superjumbo as airlines shun large four-engined jets in favour of smaller two-engined models.

The plan emaker said this month that it would cut the A380 delivery target to 12 a year from 2018, from 27 in 2015, to prevent a glut of unsold planes.

The move raises the possibility that Airbus could revert to losses on the double-decker jet after breaking even for the first time last year, but averts the need to start ordering parts for unsold planes – something it has pledged not to do.

Parts for A380s must be ordered up to two years in advance.

Boeing reported a smaller-than-expected second-quarter loss last week, helped by strong performances in its passenger jet and defence businesses.

It said last week it had won an order for 25 737 Max jets from Malaysia Airlines as the South East Asian nation’s flag carrier expands its fleet for the first time since two fatal air crashes in 2014 prompted the government to take over the company.

The operator also has options for 25 more, with the combined deal valued at $5.5 billion including the options, the airline said. Deliveries from the Chicago-based manufacturer are set to start in 2019.


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