Boeing expecting lower profits as production falls
Published 28/01/2010 | 05:00
BOEING, the world's second-largest commercial planemaker, said profits will be lower than analysts had expected because production of the 777 will fall and demand for some military programmes will be lower.
Full-year profit will be $3.7bn (e2.6bn) on the back of sales of between $64bn to $66bn, Boeing said in a statement yesterday.
Boeing is coping with lower demand from airlines after the global recession hurt air travel. It plans to scale back production of its twin-aisle 777 jet in June.
Bigger planes such as the 787 Dreamliner, which flew last month for the first time, and 747-8 jumbo-jet variant are due to finally begin production late this year after multiple setbacks that increased costs and delayed incoming revenue.
Ryanair's Michael O'Leary has said he's unlikely to place an order with Boeing because prices are too high.
The International Air Transport Association (IATA) said meanwhile that the aviation sector would face a tough 2010 making up for the lost demand in 2009 and handling new security demands.
"The industry starts 2010 with some enormous challenges. The worst is behind us, but it is not time to celebrate," IATA Director-General Giovanni Bisignani said in a statement.
The slump in demand in 2009, the worst year in the industry's history, meant airlines would face another spartan year adjusting to two-and-a-half lost years of passenger growth and three-and-a-half years of lost freight growth, he said. This would require airlines to focus on matching capacity to demand and controlling costs, he said.
Shares in Boeing, which also is the world's second-largest defence contractor, fell 11c to $57.60 in early trading in New York. The shares gained 27pc in 2009 and are still down about 43pc since the first 787 delay was announced in October 2007.
Deliveries will fall to 460 to 465 aircraft this year, after 481 aircraft were shipped to customers in 2009, Boeing said. France-based Airbus SAS had 498 shipments last year, keeping the title as largest commercial-plane builder.