Boeing reduces 747 production rate as demand lags

In this Sept. 12, 2013 file photo, Boeing Co. workers wave at their last C-17 Globemaster III cargo jet as it flies away at the aerospace company’s plant in Long Beach, Calif. Boeing on Wednesday Sept. 18, 2013, announced it will complete production of the heavy-lift cargo plane and close the final assembly plant in Long Beach in 2015. AP

Boeing will slow down production of its double-decker 747 jumbo jet as demand continues to be weak.

Counting cancellations, Boeing has not booked any new orders this year for that plane.

Boeing said on Friday that it will slow 747 production to 18 per year, or 1.5 per month. Boeing originally planned to build 24 per year, but slow sales had already prompted it to make plans to cut the rate to 21 per year.

The slowdown begins early next year, and Boeing said it will stay at that lower rate through 2015.

The slower rate “doesn’t change our confidence in the 747-8 or our commitment to the program,” said Eric Lindblad, Boeing’s vice president and general manager for the 747, in a prepared statement.

The 747 has been flying with airlines since 1970, and it was popular at first for its long range and large size. But the revamped 747-8 first delivered in 2011 has not been selling well. More than half of the orders have been for freighters, and even that market has been weak.

The 747-8 faces tough competition from the larger Airbus A380, which has been available longer. It also competes with Boeing’s smaller 777, which has been a best-seller.

Boeing has booked orders for a total of 107 of the jets, with 51 yet to be delivered — just over two years’ worth of planes at the original, faster rate.

The biggest buyer of the passenger version has been Lufthansa, with orders for 19, including nine that have been delivered. No U.S. airlines have bought it.

The 747’s list price of around $350 million makes it Boeing’s most expensive plane. That means that even if it doesn’t sell very many, it’s a big revenue generator.

Boeing said the slower rate would not have a significant financial impact.

Shares of Chicago-based Boeing Co. rose 31 cents to $122.60 in afternoon trading after rising to an all-time high of $122.86 earlier in the session.

Boeing stock has been rising steadily since March, when investors began to focus less on its problems with its new 787 and more on the rising deliveries for most of its planes.