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AP: Boeing speeds up production of 747, 777 models
Published 3/20/2010 in Business
NEW YORK (AP) — Boeing Co. will speed up production plans for its 777 and 747 models in anticipation of greater demand from commercial airlines.
Both are wide-body planes capable of carrying more than 300 passengers and flying longer routes. Several Asian airlines have ordered the planes, which are also more fuel-efficient than other aircraft models.
Asian and Latin American carriers have led the way for a surprisingly strong recovery, while improvement at U.S. carriers has lagged. The industry's leading trade group, the International Air Transport Association, cut its 2010 loss forecast in half for global airlines to $2.8 billion. The group also lowered its 2009 loss estimate to $9.4 billion from $11 billion because of the year-end rally.
Many airlines across the globe reported losses in 2009 as travel demand slumped. Boeing, the world's second-largest aircraft maker behind Airbus, said Friday that it sees the airline industry recovering this year, followed by a return to profitability in 2011. That should lead to demand for new aircraft in 2012 and beyond, the company said.
The company also said the speedup was necessary because of a "conservatively managed approach to production."
Boeing, based in Chicago, will increase production of its 777 in mid-2011 to seven airplanes per month from five. The ramp-up was originally planned for early 2012. The 777 seats more than 300 people.
The 747-8, the newest version of Boeing's iconic jumbo jet, has been plagued by production problems. It took its first flight last month after being delayed for more than a year.
The passenger version, which carries more than 400 people, is scheduled to be delivered in the second quarter of 2011. Production will increase to two airplanes per month from 1.5 in mid-2012. The ramp-up had been scheduled for mid-2013.
Boeing lists 76 orders for the 747-8 freighter and 32 for the passenger version, with the vast majority from international customers.
Boeing said it doesn't think the new production schedule will have a material impact on earnings this year. It expects to offer an update to its earnings forecast when it releases first-quarter results next month.
Boeing surprised investors in January with a bigger-than-expected fourth-quarter profit, and said testing of its two newest planes is on track.
Boeing also had said it won't scale back aircraft production, which some had feared. Its guidance for 2010 profits was less than analysts had expected.
Shares rose 90 cents, or 1.2 percent, to $71.77 in midday trading Friday after rising earlier in the session to a 52-week high of $73.30.
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