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https://www.bloomberg.com/news/articles ... pswA5AF9AYBoeing Quietly Pulls Plug on the 747, Closing Era of Jumbo Jets
By Julie Johnsson
2 juli 2020 19:00 CEST
End of 50-year run is said written between lines of financials
Pandemic deals a final indignity to Boeing, Airbus leviathans
Boeing Co. hasn’t told employees, but the company is pulling the plug on its hulking 747 jumbo jet,
ending a half-century run for the twin-aisle pioneer.
The last 747-8 will roll out of a Seattle-area factory in about two years,
a decision that hasn’t been reported
but can be teased out
from subtle wording changes in financial statements,
people familiar with the matter said.
It’s a moment that aviation enthusiasts long have dreaded,
signaling the end of the double-decker, four-engine leviathans that shrank the world. A
Airbus SE is already preparing to build the last A380 jumbo,
after the final convoy of fuselage segments rumbled to its Toulouse, France,
plant last month.
The 747 went on to rack up 1,571 orders over the decades
-- second among wide-body jets only to Boeing’s 777.
With prodding from Joe Sutter, a famed engineer who’d led the original 747 program,
the planemaker decided to develop a relatively inexpensive upgrade of the four-engine plane
to steal sales from the A380.
The strategy would have been successful,
had the 747-8 not been bedeviled by early mismanagement,
blowing its budget and deadlines,
said Richard Aboulafia, an analyst with Teal Group.
The Chicago-based company has lost about $40 million for each 747 since 2016,
when it slowed production to a trickle, making just six jets a year,
Jefferies analyst Sheila Kahyaoglu estimated.
All told, Boeing has recorded $4.2 billion in accounting charges for the 747-8,
which has been kept alive as a freighter.
The 747 notched its last order as a passenger jet in 2017 -- for Air Force One.
With travel not expected to fully recover until mid-decade,
airlines are culling aging jetliners and four-engine jumbos from fleets to limit spending.
About 91% of 747s and 97% of A380s are parked,
Credit Suisse estimated last month.
The A380 has cost Airbus about 20 billion euros ($23 billion),
breaking even or generating profits for only a three-year stretch starting in 2015,
Agency Partners estimated.
With just 251 aircraft sold over the program’s life,
the planemaker never achieved the efficiency
that comes with manufacturing at large scale, Tusa said.
Boeing, meanwhile, had been preparing for years to wind down the 747 program,
and its sales team has been sounding out customer interest
in a potential freighter version of the 777X.
If such a model goes forward,
it would bolster flagging sales of the largest twin-engine aircraft in the company’s lineup.
The telling omen that Boeing had written the iconic 747’s final chapter
came in financial filings earlier this year.
Gone was any indication that the company would continue to “evaluate the viability” of the program,
standard phrasing it had previously used.
“At a build rate of half an airplane per month,
the 747-8 program has more than two years of production ahead of it
in order to fulfill our current
We will continue to make the right decisions to keep the production line healthy and meet customer needs,”
Boeing said for this story.
The planemaker has just 15 unfilled orders for the 747 -- all freighters.
A dozen of them are headed to United Parcel Service Inc., and the fate of the rest is unclear,
part of a dispute with Russia’s Volga-Dnepr Group.
Boeing has approached the U.S. courier and other potential customers about taking the three planes,
people familiar with the matter said.
The planemaker and UPS declined to comment. Volga-Dnepr didn’t respond to requests for comment.
UPS in May agreed to take a 747 that Volga had ordered.
“Working with Boeing, we saw an opportunity to bring another 747-8 online this year in time for our peak shipping season,”
the courier said.
Ultimately, Boeing’s decision on the 747 boiled down to resource allocation,
said George Dimitroff, who leads valuations at aviation consultant Cirium.
Could the assembly line floor space be better used on another airplane, such as the 767,
which shares a bay in Boeing’s Everett, Washington, factory?
“If you’re building half an airplane a month,
it’s probably not your most profitable program,” Dimitroff said.
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