Boeing CEO sees drop in aircraft deferrals

Washington DC
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Boeing CEO James McNerney today said that aircraft deferrals have slowed in the third quarter of the year.

During the company's second quarter earnings call he characterised the drop as a "meaningful" one, but adds that he would treat that data cautiously.

"The extent to which you believe that the economy remains problematic until we see long-term improvement would suggest treat it as one data point right now, be somewhat encouraged by it but we all want to see more," says McNerney.

Boeing's total deferrals recorded year-to-date have topped 130. Sixty came in the first quarter and an additional 70 since April, when the company announced a 777 production rate cut from seven to five per month beginning in June 2010.

Boeing's CEO says the deferrals "were pretty much proportional across model types in terms of what we produce and also fairly proportional across geographies, so very tough to find a model or geographic theme, which, again, leads me to believe that it's a broad systemic economic credit issue for some airlines that are under pressure".

McNerney says there's been no change in the company's current thinking "about commercial production levels including our assessment that we can hold 737 at its current build rate. We will continue to evaluate production rates based on market conditions and customer discussions".