Boeing Company has cut the production rate for its 747-8 jetliner due to weak demand and will take on a $569 million after-tax charge when it announces financial results for the fourth quarter of 2015. The production cut will reflect in the aircraft production rate dropping from one airplane per month to 0.5 per month in September 2016. Boeing had previously announced that the production rate for the 747-8 would drop from 1.3 per month to one per month in March 2016.
"While we remain confident in the 747-8's unique value-proposition and an upcoming replacement cycle for late-model 747-400 Freighters, we're taking the prudent step to further align production with current market requirements,” said Ray Conner, Boeing vice chairman and president and CEO of Boeing Commercial Airplanes. "Global air passenger traffic growth and airplane demand remain strong, but the air cargo market recovery that began in late 2013 has stalled in recent months and slowed demand for the 747-8 Freighter.”
Boeing said that it was working to win additional orders for the 747-8 and Greg Smith, executive vice president of Business Development & Strategy and chief financial officer, said that Boeing would, “aggressively drive productivity to lower costs across our production system to offset the current market challenges.”