Keeping or ditching the 747-8?

When Boeing CEO James McNerney gave a somewhat mixed assessment of the 747-8 program last week during the earnings call, this set off a couple of key stories about the future of the airplane.

Michele Dunlop of The Evertt Herald wrote this interesting piece, published today. Max Kingsley-Jones of Flight International beat her to the punch slightly with this story on Saturday.

As readers know, we’ve been closely following the 747-8 development for more than a year and were the first to report that delays were likely.

Last November, Boeing acknowledged delays of 9-12 months, something we had reported long before the Boeing announcement. One of the reasons for the delays was the diversion of engineering resources to the 787 program, something we reported even before the roll-out of the 787 on July 8, 2007, and acknowledged by Boeing in November and again last week.

As Flight’s story suggests, and as the Boeing CEO hinted, Boeing is reassessing the viability of the 747-8I. But we are told this reassessment is a full program analysis that includes whether to continue development of the freighter, with production at a slower rate than originally envisioned; to cancel the passenger version; or to cancel the program entirely.

The collapse of the cargo traffic is huge; it was off 23% in December alone, according to IATA statistics. Airlines are parking cargo aircraft–Cathay Pacific Airways, a 747-8F customer, is parking three 747-400BCFs, for example. Other 747 freighter operators, some -8F customers, some not, are likewise cutting capacity. This certainly argues for drawing out production rates.

The passenger version has stalled. Only Lufthansa Airlines has ordered the airliner version, joined by eight customers for VIPs and presumably theĀ  USAF order for three presidential aircraft now that Airbus/EADS decided not to compete.

Lufthansa told us it does not expect Boeing to cancel the passenger model. But we’re told that at least some Boeing engineers have been told to stop work on the passenger model. We don’t know how to interpret this report and caution against drawing any conclusions. This could mean something–or it could mean nothing, for there are any number of reasons for this.

A couple of cargo version customers we talked to are less certain about the future of the entire program.

McNerney is to get a presentation of the analyses soon, perhaps as early as this week, we are told.

4 Comments on “Keeping or ditching the 747-8?

  1. I think the risk in the program lies with the -8I model. If it continues to have little traction in the market, the management might ask some pretty searching questions. However -8F has been a very successful offering so far. Perhaps if it comes to cancelling the -8I, they could add that cost to the total 748 development budget, get the freighter out of the door and produce it at a suitable rate until the market picks up. 748F is a great freighter, unchallenged in its category. Boeing have a winner there, in my opinion. It would certainly be disappointing if they cancel the whole program.

  2. I wonder how Boeing will factor in the marketing advantage for Airbus then having a monopoly on the top end of the market, if the 747-8i is no more.

  3. Interesting analysis.

    My two cents is that Boeing will cancel the 747-8I, but continue the development of the freighter. Lufthansa would likely convert their order for 20 intercontinentals into a mixture of 747-8Fs and 777Fs. The VIP versions could be delivered as modified freighters, but outfitted with 747-400 windows instead of using the 777’s window belt which is currently planned for the 747-8I. The freighter could be produced with a rate of one a month for the foreseeable future (2014-2015), which is similar to the current production rate for the dash 400.

  4. Pingback: Assessing the 747 program « Leeham News and Comment

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