April 9, 2009 in Region

Boeing cuts 2010 production rate for some jets

Associated Press
 

PITTSBURGH — Boeing Co. plans to scale back production of some of its jetliners next year as the global economic crisis further saps demand for commercial aircraft.

Boeing has been hit by sharply lower orders for commercial planes this year as the world’s economic troubles intensify and air travel wanes. Airlines have cut flights and some carriers have delayed orders and deliveries of new jets. And the credit crisis has made it more difficult for potential buyers to get loans for new planes.

The Chicago-based company said Thursday it will reduce monthly production of its twin-aisle 777 to five airplanes from seven starting in June 2010. Boeing also said it will delay earlier plans to slightly increase production of its 747-8 and 767 planes. Production of Boeing’s 737, the world’s best-selling commercial jet, will remain unchanged.

The adjustments reflect delivery deferrals requested by Boeing’s customers as fewer people fly and cargo volumes drop during the recession.

The lower production rate and weaker expected prices will cut first-quarter earnings by about 38 cents per share, the company said. Boeing will provide further financial guidance when it reports first-quarter earnings on April 22.

“These are extremely difficult economic times for our customers,” Scott Carson, Boeing Commercial Airplanes president and chief executive, said in a statement. “It’s necessary to adjust our production plans to align supply with these tough market conditions.”

Shares of Boeing fell $1.15, or 2.9 percent, to $38 in after-hours trading. During the regular session, the stock gained $2.28, or 6.2 percent, to close at $39.15 in a broad market rally.

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