Boeing to Cut 777 Output

Aerospace giant Boeing Thursday said it would slash production of its twin-aisle 777 aircraft to five planes per month from seven, citing "significant deterioration" in the airline industry. The company said in a statement it decided to reduce 777 production, beginning in June 2010, "due to significant deterioration in the business environment for airlines and cargo operators driven by unprecedented global economic conditions." Boeing said it would also delay previous plans to "modestly" increase production of its new 747-8 jumbo planes and 767 aircraft. The company emphasized that the production rate adjustments on the three aircraft models "solely reflect delivery deferrals requested by customers in response to unprecedented declines in global passenger and air-cargo volumes." No 767, 747 or 777 orders have been canceled this year, it added. No change in the production rate of the 737 aircraft was being made "at this time." "These are extremely difficult economic times for our customers," Scott Carson, Boeing Commercial Airplanes president and chief executive, said in the statement. "It's necessary to adjust our production plans to align supply with these tough market conditions. We are in close contact with our customers as we continue to monitor this dynamic business environment." The company said it has a commercial backlog of more than 3,500 airplanes. It said the weak global economy had contributed to significant declines in the indices that affect forecasted pricing for commercial airplanes already ordered. The production decisions and the price declines will hit first-quarter 2009 net profit, the company said, projecting a reduction of 38% per share. Boeing said it would give updated full year earnings guidance on the when it reports first-quarter financial results on April 22. At the beginning of the year, Boeing predicted 2009 earnings per share between $5.05 and $5.35. Boeing in January reported a 56-million-dollar loss in the 2008 fourth quarter and said it would slash 10,000 jobs this year due to the uncertain outlook. Copyright Agence France-Presse, 2009