Boeing To Further Slow 747 Production

Boeing will slow production of the 747-8 by 23 percent to one per month starting in March, in an effort to keep the production line running amid sluggish demand.

Boeing is currently building 747s at a rate of 1.5 a month and had already announced plans to reduce the rate to 1.3 a month from September.

The company said the decision to slow production further was not related to Tuesday's announcement that President Dennis Muilenburg will succeed Jim McNerney as chief executive on July 1.

Boeing had been widely expected to slow production of its biggest plane in response to weakness in the cargo market. Those concerns were eased last week when Russian cargo airline Volga-Dnepr committed to buying 20 747s.

The US Air Force said earlier this year that it would buy an unspecified number of 747s to update the Air Force One presidential fleet.

But last year Boeing logged no net 747 orders, setting up 2015 as a make-or-break year for the plane that was developed in the late 1960s.

Earlier this month, Boeing cut by 13 percent its long-range forecast for large wide-body aircraft, a category that includes the 747 and the Airbus A380.

Boeing expects 540 of these planes will be needed over the next 20 years, down from 620 it forecast in 2014.

"With recent orders and commitments, along with these changes announced today, we anticipate a stable future for the 747 production system," Bruce Dickinson, vice president and general manager of the 747, said in an internal company report.

The 747 is a workhorse for air freight companies. Even though the cargo market is recovering, the "overcapacity of freighters in the market" has prompted Boeing to slow production, Dickinson said.

Airbus, also struggling to sell its A380, is considering updating the aircraft with new, more efficient engines - a decision that could come later this year if it can find enough customers.