Boeing Sees Sales Drop Maintains B737 Output

WASHINGTON

February 2010 

Boeing expects its sales to decline as much as 6% this year as the impact of lower 777 production rates and cuts to military programs sink in. But it also sees a rebound in 2011 as deliveries of new 787 and 747-8 jets begin to ramp up.

In a cautiously optimistic earnings call today, Chairman and CEO James McNerney said the aircraft builder will deliver 460-465 commercial jets in 2010, down from 481 in 2009. The drop reflects last year’s decision to lower output of the 777 widebody jet. However, Boeing again insisted that it will maintain production of its 737 narrowbody jet at 31 per month, defying skeptics that have long predicted sluggish demand from the struggling airline industry will force the company to curtail output of its best-selling aircraft.

With just 142 net orders in 2009 – 263 new orders minus 121 cancellations – Boeing’s deliveries outpaced new orders by more than three-to-one. And McNerney acknowledges that the company expects a negative “book to build” rate again in 2010 as market conditions remain challenging. While cancellation rates began to trend downward in the fourth quarter of 2009 and discussions with potential buyers have not slowed, “we believe it will take some time for economic indicators to rebound significantly,” he said.