SEATTLE — With the cancellation of another 16 orders for its 787 Dreamliner, which is two years late, Boeing Co. has started out 2009 losing more orders than it has won.
Boeing has won 18 orders and lost 31 through cancellations. A Russian airline backed away this month from its order for 15 Dreamliners. The latest 787 order cancellation came from a Dubai leasing company.
Underscoring just how difficult the current industry downturn will be, Boeing chief financial officer James Bell told an industry conference Thursday that Boeing might have to lower production rates in 2010. Bell did not say so, but if fewer planes are built, the company could trim or reassign some of the people who assemble its jets in Washington state.
Boeing recently announced that it will reduce its workforce by about 10,000 jobs this year—with about half of those jobs in the Puget Sound area. The cuts are a result of the global recession and economic crisis. Airlines are cutting capacity as traffic falls.
But so far, Boeing has said that most of the job losses will not be related to production because it wants to keep building jets at current rates, given a record backlog of planes.
Speaking at a Cowen & Co. investors conference, Bell said it takes roughly 12 to 18 months to lower production rates in an orderly manner.
Boeing can reduce production more quickly, which happened after the Sept. 11, 2001, attacks, but Bell said Boeing’s backlog gives the company more time to keep rates at current levels.
Last year, Boeing had eight orders canceled and 110 planes deferred.
Boeing already has warned this year that cancellations and deferrals are likely to increase. A growing number of airlines are expected to push back delivery of planes. In the U.S., Southwest and American airlines have announced they will take fewer planes over the next few years.
“More of the pressure is on deferrals,” Bell said. “Now we are starting to quote some open positions in 2010.”
In the past, Boeing has said it has more than enough customers who want to get planes faster to take earlier delivery positions when they become available through an order cancellation or deferral. Now, there are open delivery slots in 2010.
If those can’t be filled, rates would have to be cut.
In January, Boeing delivered 35 planes, one more than it delivered a year ago. But gross orders are down 72 percent. In January last year, Boeing won 65 orders. This year, it has only 18. All of those are for 737s. Ryanair exercised options for 13 planes, and Southwest ordered five. But Boeing has also lost the 31 Dreamliner orders, which gives it a minus 13 net orders for the year.
The latest 787 cancellations came from LCAL, a Dubai company that was established just for leasing the 21 787s that it had ordered.
The remaining five orders have not been canceled.
