Higher costs reported by the 747-8 development program in the third quarter are causing frustration with Boeing's corporate executives, but the widebody is continuing to make design progress despite the strike.

Boeing's third quarter earnings statement released yesterday contains two references to "additional 747 program costs", but does not elaborate.

Jim McNerney, Boeing chairman, president and CEO, noted executives are "frustrated by the incremental cost we're seeing" on the 747-8 during a conference call with reporters.

Boeing spokesmen declined to detail neither the amount of nor the causes for the cost increases.

"We don't provide specific details on the issues the program is having from a cost perspective," a spokesman tells ATI.

Boeing Commercial Airplanes reported overall research and development costs at $2.1 billion for the first nine months of 2008. The third quarter outlay amounted to $705 million, or about 7% higher than the same period a year ago.

As a derivative aimed at a "niche" long-haul market, the 747-8 may be more sensitive to cost pressure than Boeing's new-build development programmes.

Boeing estimates a total market for 345 747-8s, including roughly 260 freighters and 85 intercontinental passenger airliners.

So far, Boeing has signed firm orders for 106 aircraft, which only include 28 for the passenger version spread among seven VIP customers and Lufthansa Airlines.

Boeing had started production on the first 747-8F for Cargolux Airlines in August before the strike began on 6 September.

But engineering work has continued to make progress. About 95% of the engineering drawings for the freighter variant have been released to suppliers, Boeing says.

Source: Air Transport Intelligence news