Boeing cuts production of 747-8 cargo planes resulting in a $569m charge in its fourth quarter results
Boeing is the cutting down production of its 747-8 cargo planes, resulting in a $569m ($340m) post-tax write-down in its fourth quarter 2015 results.
Thanks to a sluggish market, Boeing will slow production of the planes from one aircraft a month, to one every two months. The charge comes to $0.84 a share.
Ray Conner, Boeing vice chairman, and president and chief executive of Boeing's commercial division, said:
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. While we remain confident in the 747-8's unique value-proposition, we're taking the prudent step to further align production with current market requirements.
Air freight fell in November, with volumes down 1.2 per cent from the year before, while passenger traffic grew 5.9 per cent, according to the International Air Transport Association.
The charge will not affect the company's full year revenue of cash flow when it reports its results next week on 27 January.