Boeing issues profit warning - to slash production of 777

14 April 2009

Commercial aircraft manufacturer and aerospace giant, Boeing Co, has issued a profit warning for the first quarter and also announced a 29 per cent cut in B777 production rates. The Chicago-headquartered company cited "significant deterioration in the business environment for airlines and cargo operators driven by unprecedented global economic conditions".

It also disclosed its B747 programme was currently in a loss position.

The company said it will reduce monthly production of the B777 from seven to five from June 2010 and will also delay plans to increase B747-8 and B767 production. No change is being made at this time to the B737 production rate, according to Boeing.

Industry experts , however, warned that even this position could be revised by the end of 2009 as more airlines ground aircraft.

Boeing added the weak global economy has contributed to "significant declines in the escalation indices that affect forecasted pricing for commercial airplanes already ordered".

Boeing Commercial Airplanes president and CEO, Scott Carson, stated, "…these are extremely difficult economic times for our customers". He added, "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".