Wednesday, February 17, 2016

Boeing predicts 747-8 rate increase in 2019

Boeing has revealed long-term plans to double the planned production rate on the 747-8 programme in 2019, according to new financial documents.

Output on the 747-8 line is falling from 1.3 per month today to 0.5 per month in September 2016, reflecting continued anemic growth in the air cargo market.

But Boeing’s newly-released annual report says the company anticipates the rate will return to one per month in three years.

“We are currently producing at a rate of 1.3 per month with plans to reduce the rate to one per month in March 2016, further reduce the rate to 0.5 per month in September 2016 and then return to one per month in 2019,” the company says.

The 747-8 assembly line has struggled to stay alive and many analysts have suggested Boeing is likely to shut down the line in the near future.

But Boeing executives have made slightly more optimistic statements, acknowledging a slow market today but predicting that demand could pick back up in 2019. That’s when more than 200 747-400s begin to reach retirement age, Boeing says, and potentially fuel a replacement market.
Boeing also warns in the annual report that another forward-loss could be reported on the 747-8 if new sales do not materialize.

“We have a number of completed aircraft in inventory as well as unsold production positions and we remain focused on obtaining additional orders and implementing cost-reduction efforts,” Boeing adds in the annual report.

“If we are unable to obtain sufficient orders in 2016 and/or market, production and other risks cannot be mitigated, the programme could face an additional reach-forward loss that may be material,” the company says.

(Stephen Trimble - Flightglobal News)

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