Boeing to cut production rate of 747 jumbo jet

Boeing said Thursday it will reduce production rates of its 747-8 jumbo jet because of a sluggish air cargo market.

The Chicago-based company said in a news release that production on the aircraft will be lowered from 1.3 airplanes to 1 airplane a month beginning in March, and in September it will be lowered from one airplane a month to 0.5 — roughly half an airplane — a month.

“Global air passenger traffic growth and airplane demand remain strong, but the air cargo market recovery that began in late 2013 has stalled in recent months and slowed demand for the 747-8 Freighter,” Ray Conner, president and CEO of Boeing Commercial Airplanes, said in the release. “While we remain confident in the 747-8’s unique value-proposition and an upcoming replacement cycle for late-model 747-400 Freighters, we’re taking the prudent step to further align production with current market requirements.”

Boeing said it would recognize a $569 million after-tax charge on its fourth-quarter 2015 results, which it will announce on Jan. 27.

Spirit AeroSystems manufactures the forward fuselage, wing leading edge, and struts and pylons of the jet. A spokesman said there won’t be an immediate impact at Spirit and that the company is working closely with Boeing to meet its delivery schedules and rates. He added that other commercial aircraft programs at Spirit are experiencing rate increases.

The 747-8 has been a slow seller for Boeing in recent years. Boeing delivered 20 747s in 2014 and 19 last year.

While global air cargo freight volume declined 1.5 percent between November 2015 and November 2014, year-to-date it was up 2.3 percent in the first 11 months of 2015, according to the latest data from the International Air Transport Association.

This story was originally published January 21, 2016 at 6:16 PM with the headline "Boeing to cut production rate of 747 jumbo jet."