Boeing has decided to lower yearly output of the 747-8 by 2.4 aircraft starting in September 2015 due to a slower recovery cycle in the cargo market.
Annual production will drop from 18 747-8s to 15.6 beginning next September, Boeing says.
The monthly production rate falls from 1.5 aircraft to 1.3 747-8s.
“We’re making this minor adjustment because the near-term recovery in the cargo market has not been as robust as expected,” Boeing says. “We continue to believe in the long-term strength of the freighter market and the 747-8 is uniquely positioned to capture this demand.”
The latest production cut comes 14 months after Boeing lowered output from 21 747-8s per year to 18.
At the time, some Boeing suppliers, such as LMI Aerospace, told analysts that it would be contractually difficult for Boeing to reduce the production rate for the 747-8 below 1.5 per month.
Boeing executives, however, have said that further production rate cuts were possible if demand did not improve.
So far in 2014, Boeing has added orders for two 747-8s, but customers canceled orders for two aircraft. Boeing has 39 747-8s remaining in the backlog, or enough for about 28 months of production at planned production rates.
In October, IATA released a five year air cargo forecast predicting annual growth averaging about 4% through 2018. While an improvement compared to the stagnated air cargo market since 2008, that growth rate is still slightly below the 5% yearly growth threshold cited by Boeing as necessary to stimulate demand for buying new freighters.
Meanwhile, demand for the passenger-carrying version of the 747-8 has failed to pick up the slack. In July, Boeing revealed proposed design changes that could allow the 747-8 Intercontinental to fly from Asia to the US east coast or from the Middle East to the US west coast non-stop.
But the 747-8I faces tough competition from Boeing’s product line-up. By 2020, Boeing plans to start delivering the 777-9X with a similar passenger capacity and even better fuel efficiency than the 777-300ER. The latter itself presents a competitive threat to the 747-8I. In September, Boeing’s top salesman in Africa said the 777-300ER has better fuel efficiency on a seat-mile basis than the 747-8I.