Boeing delays B747-8 and books USD1 billion charge, set to deliver 480 commercial aircraft in 2009
Boeing announced yesterday that it is going to book a further USD1 billion in write-downs related to its B747-8 programme in its upcoming 3Q2009 results. On top of this, the manufacturer is pushing back the first flight of the initial freighter variant from late 2009 to early 2010, the second major delay to the programme, which is now close to 12 months behind schedule.
After pronouncements just last month that the B747-8 programme planned to have three test aircraft flying by the end of the year, this is yet another serious blow to customer confidence in Boeing’s ability to deliver its products on time. The manufacturer’s B787 has already suffered through more than two years of delays, and the first flight (in late Nov-2009 or Dec-2009) is another crucial test of Boeing’s credibility, and also customer patience.
The first delivery of the B747-8 (the Freighter version, due to go to Luxemburg’s Cargolux) has now been pushed back from 3Q2010 to 4Q2010, while first delivery of the Intercontinental passenger variant (to Lufthansa) is still scheduled for 4Q2011. The manufacturer earlier pushed back delivery to Lufthansa from late 2010 to 2Q2011.
The B747 programme is in a loss position, although the company still has confidence in its long-term viability. It has booked 78 orders for the freighter variant and 27 for the passenger version, with another 44 options.
Of the latest USD1 billion charge, USD640 million is due to higher estimated production costs, both at Boeing and at suppliers. The remaining USD360 million charge is more interesting and hints at Boeing’s near-term outlook for the very large aircraft market. The charge relates to the “challenging market conditions” faced by the company, and its decision to maintain future B747-8 production at a rate of 1.5 aircraft per month, deferring an increase to 2 per month by nearly two years longer than previously planned.
Boeing foresees orders for 740 very large widebodies over the next 20 years, in contrast to Airbus’ expectations of approximately 1,320. Airbus is hoping to produce “more than 20” A380s next year, to go with the 19 already delivered since 2007 (including 13 in 2009).
Boeing deliveries up in 3Q2009
Boeing delivered 113 commercial aircraft in 3Q2009, comprised of 90 B737NGs, four B767s and 19 B777s. The manufacturer has delivered 359 aircraft for the year to date.
Quarterly deliveries were up by one third over the same period last year, primarily due to the combination of the machinists strike and supplier production problems in 2008. With production rates set to be maintained at current levels, Boeing is on track to deliver approximately 480 aircraft in 2009, matching a similar target set by Airbus.
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