Despite receiving a big Memorandum of Understanding for 20 new 747-8F aircraft last week at the Paris Air Show, Boeing announced that they would slow production for the original jumbo jet at their Everett, WA manufacturing facility. This is the fourth time in two years that 747-8 production has been throttled back.
Boeing will still turn a profit on the jet at the new rate of just one new aircraft per month, down from its current rate of 1.3 new aircraft per month. The production rate change is expected to go into effect by March 2016. With list prices of over $380 million, Boeing’s production schedule shows current orders for 32 747-8F aircraft, hardly enough to sustain the line through the end of the decade.
Meanwhile, big changes are taking place in the global air cargo market. The three largest Chinese cargo air carriers (Air China Cargo, China Cargo Airlines and China Southern Cargo) announced yesterday that they would merge. While it is not known when the merger would take place, the new company would become the largest air freight operator in Asia.
Air China Cargo, China Cargo Airlines and China Southern Cargo all currently operate a mix of aircraft that includes Boeing 747-400F and 747-400BCF variants, so the new combined entity could conceivably place new orders for 747-8F aircraft in the future. Air China’s passenger line received it’s seventh and final 747-8i last week.
With another order of 20 or so aircraft, Boeing could sustain the 747-8 line into the early 2020 timeframe. However, Airbus could still elect to re-engine the superjumbo A380 and finally offer a freighter version during that time, which could compel would-be Boeing customers to switch manufacturer allegiances. Further, Boeing’s own 777X widebody will be entering service in the next few years, which could cannibalize orders for the 747-8F program.
The Boeing 747 has been the jumbo hauler of choice for passengers, cargo, VIP’s and many other specialized missions for nearly 50 years. Now facing pressure from both external and internal forces, the fate of the iconic jet remains in suspension. While we don’t know what the global aircraft market will demand in the coming months and years, Boeing’s sales team is surely scrambling to secure additional orders so the Queen of the Skies will continue to be a product in Boeing’s commercial aircraft catalog for many years to come.
Photo credit: 747-8F in production - Ted S. Warren/AP, Air China 747-8i in flight - Wikicommons