- The Washington Times - Friday, January 9, 2009

Boeing Co., hurt by a two-month strike, posted a 15 percent decline in deliveries last year and lost its lead in orders to Airbus SAS, the only larger commercial-plane maker.

The global recession snapped three record years of demand with net orders falling to 662 from 1,413 in 2007. The decline places Chicago-based Boeing behind Airbus in shipments for the sixth straight year.

Boeing and Airbus had racked up record orders starting in 2005 for new aircraft that use less fuel, creating backlogs that would take more than seven years to build. Demand slowed in 2008 as the recession forced a cutback in air travel.

Airbus, which hasn’t reported December figures, won orders for 756 jets in the year’s first 11 months, two-thirds of the intake for the year-earlier period, and delivered 437 planes.

Boeing Chief Executive Officer James McNerney had boosted production to 441 airliners in 2007 and had planned to beat Airbus by keeping up the rate and adding production of the new 787 Dreamliner.

Instead, the 787’s entry into service has been delayed almost two years and a strike idled factories for two months. Returning workers then had to take extra time to replace thousands of defective nut plates that had been installed on fuselages by a supplier.

Boeing said 93 Dreamliners were ordered in 2008, primarily by customers in the Middle East. The 737 remained the biggest seller, with 484 orders, while customers agreed to buy 54 777s, 28 767s and three 747s.

The company delivered 50 planes in the fourth quarter, down from 112 a year earlier. The machinists’ walkout began Sept. 6 and limited Boeing’s deliveries to 12 in September, five in October and four in November, compared with a monthly average of about 40 earlier in the year. The rate returned to 41 in December.

Boeing may announce that it’s reducing production, rather than returning to pre-strike rates, when it provides updated forecasts this month, said David Strauss, a New York-based analyst with UBS Investment Research.

“We think Boeing will move to cut production amongst declining air traffic and limited aircraft financing,” which is curbing demand from airlines, Mr. Strauss wrote in a Dec. 23 note to clients. Mr. Strauss, who has a “sell” recommendation on the company’s stock, predicts Boeing will ship 460 jets this year and 410 in 2010.

Excluding cancellations, Boeing’s total orders were 668 in 2008, compared with 1,422 in 2007. Airbus, a Toulouse, France-based unit of European Aeronautic, Defense & Space Co., plans to report final figures Jan. 15.

Boeing rose 3 cents to $44.79 in New York Stock Exchange composite trading. The stock has declined 44 percent in the past 12 months.

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