Boeing Loses Guggenheim's Order for 747-8 Freighters on Delivery Setbacks
Stock Chart for Boeing Co/The (BA)
Boeing Co., whose new 747-8 jumbo- freighter has been delayed by a year and a half, lost a customer when Guggenheim Aviation Partners LLC canceled its remaining order for two of the jets because of delivery setbacks.
“It’s very disappointing for us as we wanted to stay with the program,” said Steve Rimmer, chief executive officer of the Issaquah, Washington-based leasing firm. “The cancellation was a direct result of the delays and the commercial consequences of those delays.”
Guggenheim initially ordered four of the freighters, which carry list prices of $319.3 million apiece. It cut the purchase in half in December 2009 because of uncertainty surrounding the timing of the deliveries. In September, Boeing added another six months to the yearlong delay while engineers redesign some parts. The first delivery now isn’t slated until the middle of 2011.
The cancellation came as Boeing rival Airbus SAS won an order for six A380 superjumbo passenger planes from Asiana Airlines Inc., boosting the purchase tally for the model to 240 planes from 18 customers. Boeing’s most recent order for the 747-8 freighter was in 2007, and only two airlines have purchased the passenger version of the jumbo jet, including an order placed in December 2009. Orders for both 747 versions now stand at 107.
“Guggenheim has been a great customer, so we’re very disappointed, but it’s part of the ebb and flow of business as you work on development programs,” Randy Tinseth, the Boeing Commercial Airplanes unit’s marketing chief, said in an interview today.
Fifth Test Jet
Boeing began offering the new freighter, which has 16 percent more cargo space than the 747-400, for sale in 2005. The fifth variant of the 41-year-old plane stretches the iconic hump on top and includes new engines and the longest wing Boeing has ever built.
The design forced engineers to make more changes than the company expected, leading to problems that now have to be fixed, including buffeting around the wheel well on landings and vibration during flight. Boeing is adding a fifth test jet to speed up the work, boosting the initial fleet of three.
Boeing had signaled improved demand for the 747-8 last year. The company said in March it would bring a planned production increase forward by a year, to 2012. Boeing Commercial Airplanes division President Jim Albaugh said last year that salesmen were discussing the freighter and passenger versions of the plane with three airlines.
Handful of Customers
“We’re in talks with a handful of customers,” Tinseth said today. “Most of them are in the Asia Pacific region, because that’s where most of the demand for this aircraft is going to be because of the route structure of the airlines.”
Boeing’s commercial orders last year rose more than three- fold because of increased demand for the single-aisle 737, used mostly on short-haul routes, Boeing said earlier today. Now carriers’ fleet managers will consider purchases of larger jets such as the 747, Tinseth said.
“As airlines switch their focus from domestic and regional planes, they next turn to their widebodies, so I see growing demand there in the next couple of years,” he said.
To contact the reporter on this story: Susanna Ray in Seattle at email@example.com
To contact the editor responsible for this story: Ed Dufner at firstname.lastname@example.org
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.