Strike, weaker demand hurt Boeing deliveries

Strike, weaker demand hurt Boeing deliveries

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By DANIEL LOVERING, AP Manufacturing Writer

PITTSBURGH (AP) - Hurt by an autumn strike and shrinking airline demand, Boeing Co.'s passenger jet deliveries fell 15 percent in 2008, ensuring that archrival Airbus retained its rank as the world's top plane maker.

Orders for Boeing planes, meanwhile, plunged by more than half last year, following three straight years of exceptionally strong bookings, a grim reminder that carriers have been scaling back spending since the summer to cope with fewer air travelers as the world economy weakens.

Cowen & Co. analyst Cai von Rumohr was cautious about the company's outlook for 2009 since airlines may continue to back out of orders.

"Given the tough economy, stretchouts/cancellations remain an issue ... and cash flow is apt to be under pressure," he said.

Boeing, the world's second-largest plane manufacturer after Airbus, has blamed an eight-week strike by machinists and other production glitches for delaying the delivery of new jetliners. The planes include the world's top-selling 737 and its long-awaited 787, a next-generation aircraft built for fuel efficiency with carbon composite parts.

The strike by 27,000 union workers, including electricians, painters and mechanics, forced Chicago-based Boeing to shut its commercial aircraft plants from early September to early November, costing the company an estimated $100 million a day in deferred revenue.

But even without the work stoppage, demand for Boeing aircraft slowed after the summer because of the global economic downturn, which forced airlines to reduce flights.

Analysts had anticipated Boeing's lower overall aircraft deliveries for 2008 as a result of the strike.

The company on Thursday reported 375 deliveries for 2008, down from 441 planes a year earlier. The 2008 tally included 41 deliveries in December, a typical monthly number after several months of strike-dampened levels.

But Airbus, based in Toulouse, France, already had exceeded those results in the first 11 months of the year. It reported 437 jet deliveries.

Boeing delivered just 12 commercial airplanes in September - two of them before the strike began on Sept. 6 - five in October and four in November.

That compared with 36 planes delivered monthly in July and August.

Cowen & Co.'s von Rumohr said Boeing's December numbers were an encouraging improvement over those for November, although he had anticipated the rebound.

Boeing said it took 662 net orders for commercial aircraft last year, down from 1,413 in 2007 and its lowest total since 2004. The three top customers by number of planes were all foreign carriers, reflecting the deep trouble facing U.S. airlines.

The company's best seller in 2008 was a new version of the workhorse 737 model, with 484 net orders, down from 846 in 2007. The 737 is the only plane in Southwest Airline Co.'s fleet and a favorite of other carriers.

Boeing said it took 93 net orders for its upcoming 787 model, mostly from customers in the Middle East. Net orders accounts for cancelations,

Boeing's top customer by planes was Indonesian budget carrier Lion Air, which ordered 56 of the 737s. FlyDubai ordered 50 737s, and Etihad Airways, the national airline of the United Arab Emirates, ordered 45 planes, all 777s and 787s.

AMR Corp.'s American Airlines ordered 36 Boeing 737s, the leading customer among U.S. carriers.

In the three prior years, Boeing booked more than 1,000 net orders annually - 1,413 in 2007, 1,044 in 2006, and 1,002 in 2005, according to its Web site.

The 2008 net-order figure, which accounts for cancelations, brought Boeing's backlog of unfilled commercial orders to more than 3,700.

Airbus has reported 756 net orders for the year through Nov. 30. The company reports its final 2008 tally for deliveries and orders on Jan. 15.

Shares of Boeing rose 3 cents to $44.79 on Thursday.

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AP Airlines Writer David Koenig in Dallas contributed to this report.

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