Boeing production up, sales down

Boeing steadily increased its production pace through 2009 and delivered 481 airplanes, but the recession and accompanying airline crisis brought a collapse in new sales.

Boeing won a net total of 142 new jet orders for the year — worth just more than $4 billion, based on estimates of aircraft market value by aviation consultancy Avitas.

That compares with 662 net orders in 2008, valued at about $44 billion.

In 2007, Boeing's all-time record order year, the company won 1,413 net orders, valued at about $106 billion.

While Boeing won 263 gross orders last year, the net total was reduced by 121 cancellations. Those included 83 canceled orders for the 787 Dreamliner, which finally flew at the end of the year, about 28 months behind its original schedule.

Randy Tinseth, Boeing vice president for marketing of commercial airplanes, attributed the drop to the decline in air traffic for both passengers and freight. He noted that the International Air Transport Association predicts airlines worldwide will lose a total of $11 billion in 2009.

"The order numbers reflect the challenges of the market," Tinseth said in an interview.

While sales were low in 2009, Boeing production workers didn't slacken.

The delivery total is up from just 375 delivered in 2008, when production was hit by a two-month Machinists strike.

Compared with 2007, the previous full year of production, the delivery figure is still up by 40 jets, an increase entirely attributable to an increased pace of 737 production in Renton, Wash.

In 2007, the single-aisle 737s rolled out at an average pace of 27.5 jets a month. In 2009, that pace quickened to 31 a month.

Airbus will not report its final 2009 sales and delivery figures until Tuesday, but it is clear the European planemaker will best Boeing in both categories.

As of November, Airbus already had 194 net orders. And Bloomberg News reported from Toulouse, France, that the Airbus delivery total for the year is 498 jets.

Prospects for the year ahead are for continued low sales and for reduced production rates, in line with slumping airplane demand.

"2010 will be another challenging year in the marketplace," Tinseth said.

He said airlines likely won't become profitable until 2011, and Boeing doesn't expect much of a recovery in sales until the following year.

This year's deliveries will be reduced by a mid-year cut in production of 777s from seven a month to five a month. Industry analysts think there is a high risk that the 737 production rate will also have to be cut.

Boeing said it will provide guidance on prospects for 2010 jet deliveries when the company releases year-end earnings on Jan. 27.