Boeing slows production of 747; little financial impact seen

Boeing slows production of 747; little financial impact seen

NEW YORK - Boeing Co said on Friday it was notching down the production rate of its biggest plane, the iconic bubble-top 747, due to slack demand.

The slowdown won't affect financial forecasts for Boeing, analysts said, because production of the jet is so limited. Only about 50 planes, with a list price of US$357 million (S$442 million), are currently on order. Analysts expect Boeing to report solid third-quarter results on Wednesday, and many predict its stock, currently at record levels, will continue climbing.

The rate reduction reflects declining use of the 747 and to a lesser extent its newer rival, the Airbus A380 superjumbo. Rather than flying those large four-engine jets, many airlines prefer to fly slightly smaller twin-engine planes that are easier to fill and burn less fuel.

The decision also reflects Boeing's prescience in deciding to build the 787 a decade ago. While Airbus developed the double-decker A380, which carries 525 people in some configurations, Boeing correctly predicted that airlines would want long-range, twin-engine planes that can fly direct, point to point routes, rather than carrying passengers through hubs where they would have to change planes.

"The A380 has more life since it is much newer," said Ken Herbert, an analyst at Canaccord Genuity Inc. But with the twin-engine Airbus A350-1000 and Boeing 777X jets coming out,"the days of the quad engine are numbered, in my view."

Boeing focused on building the 250-seat 787, and extending its best-selling 777 to fly farther and carry about 368 passengers. Airbus is due to deliver the first of its A350 family, which will eventually carry up to 350 passengers, starting next year.

The 747-8 carries 467 passengers in a typical configuration, and the company said it continues to invest in the plane, which has engine technology derived from the 787.

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