Boeing will cut production of 747, take $569 million charge

Boeing 747 Cargo Plane (image: Shutterstock)

CHICAGO (AP) — Boeing says it will cut production of its 747-8 cargo plane in half this September because of a slowdown in the air-freight business.

The company said Thursday that it will record a $569 million charge against fourth-quarter earnings.

Instead of producing one big freighter a month, Boeing Co. will turn out one every other month. Boeing said the air-freight market started to recover in 2013 but stalled, reducing demand for planes. Boeing had previously announced it would cut 747-8 production from 1.3 planes a month to one beginning in March.

The list price for one plane is $379 million.

Separately, the Chicago company got a boost when United Airlines announced it will buy 40 Boeing 737-700 jets to replace smaller planes used by its regional-airline partners. At list price, those planes would be worth more than $3.2 billion, although airlines routinely get big discounts.

Boeing shares rose $1.26 to close at $123.40. In late trading after the 787 announcement, they were down $1.70 to $121.70.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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