Boeing commercial jet orders tumble

Boeing commercial jet orders tumble
A Boeing 737 is seen during assembly in Renton, Wash.
Boeing Co.'s orders for freight and passenger jets fell sharply in January, hurt by declining air travel amid the global economic slump.

The Chicago-based airplane maker received orders for just 18 jetliners last month, a 72 percent drop from the 65 planes ordered a year earlier, according to figures posted Thursday on the company's Web site.

Jet deliveries rose by one to 35 planes in January.

The report follows a tough 2008, when Boeing's orders plunged following three years of exceptionally strong growth.

The world's second-largest plane manufacturer after Europe's Airbus, Boeing has endured a series of setbacks. It has blamed production glitches and an eight-week strike by union workers last fall for delayed deliveries of new jetliners. The affected aircraft include the world's top-selling 737 and Boeing's long-awaited 787, a next-generation aircraft built for fuel efficiency with carbon composite parts.

But even without the work stoppage, which forced Boeing to shut its commercial aircraft operations from September to November, demand for the company's aircraft slowed after the summer because of the weakening global economy. Airlines need fewer planes because they are scaling back flights to match a drop in air travel.

Last week, the company posted a surprise fourth-quarter loss and announced plans to cut 10,000 jobs. At the time, Boeing's chief executive, Jim McNerney, said: "The global economy continues to weaken and is adversely affecting air traffic growth and financing."

Boeing expects a rise in deferred orders this year, though the size, diversity and quality of its backlog allows greater flexibility than in the past, he added.

Boeing's backlog grew 8 percent in 2008. It consists of more than 3,700 planes worth a record $352 billion. The three top customers by number of planes were all foreign carriers, reflecting the trouble facing U.S. airlines.

However, on Thursday, Boeing said a Dubai company established to lease its 787 has slashed its order by more than three-quarters.

Fakher Daghestani, Boeing's communications manager in the Middle East, said by phone that the company, LCAL, cut its order for the model to five planes from 21.

Representatives for LCAL did not answer calls or e-mails seeking comment.

Daghestani said the cancellations had nothing to do with delays that have plagued the 787's development. Rather, he said the leasing company is "preparing for tough challenges caused by the growing global recession."

The order cancellation was Boeing's first from the Middle East - a major source of recent orders and a key growth area for the plane maker - since the global meltdown began.

Last week, Russia's S7 Group canceled orders for 15 of the hot-selling but long-delayed 787 jets for unspecified reasons.

For all of 2008, Boeing received 662 net orders for commercial aircraft, down from 1,413 in 2007 and its lowest total since 2004.

Shares of Boeing rose 54 cents, or 1.3 percent, to $42.51 in early afternoon trading Thursday.