Boeing Co. seems to be facing a tough time in the freight industry since the market has slowed since early August. And adding up to the company's hardships is the cancellation of an order of four of its 747-8F freighters by Nippon Cargo Airlines Ltd., Japan's largest cargo carrier. But despite the cancellations, current production plans still continues.
On Thursday, Boeing Co., the world's largest aerospace company and leading manufacturer of commercial jetliners, had confirmed Nippon's order cancellation. According to 24/7 Wall St, the cancellation came amid the company's plan for a production cut on its 747-8, which is set to take effect this month.
Since the International Air Transport Association (IATA) reported that the freight market had slowed, Boeing Co. appeared to be either growing or shrinking slowly. Another factor seen to contribute to the slower growth is the fact that the market for freighters is also being held down by the increase in freight carried on scheduled passenger flights.
Meanwhile, Boeing Co. had announced on Friday that the company's current production plans will carry on despite an order cancellation. The American multinational corporation has just 25 confirmed 747 orders, which is equivalent to almost two years of production for a whopping $379 million, Economic Times noted.
"[The cancellation will have] no impact on production rates," Boeing spokesman Doug Alder said.
The sales decline of very large aircraft has sparked concerns on experts, questioning on how long will Boeing and European rival Airbus Group NV can keep building double-decker planes since 2015 seems to be a make-or-break year for both, as per Business World. And is sales continues to drop, Deutsche Bank analyst Myles Walton said Boeing could face the possibility of taking an accounting charge of $1 billion or more on the 747-8 programme.
"There's a judgement certainly on the part of the company, its auditors and conversations with customers," Walton said.
With the cancellation on its midst, it remains uncertain on whether Boeing Co. could go on without an order before prompting such action.
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