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S7 pulls US$2.4bn Boeing order

Boeing has been dealt yet another blow after Russian airline S7 cancelled an order worth $2.4bn for 15 Boeing-787 Dreamliner aircraft. It is the first airline to cancel a major contract for the 787.
The news will come as a blow to Boeing after it yesterday revealed plummeting profits and announced it was cutting 10,000 jobs, equivalent to 6 percent of its 162,200-strong workforce, as the demand for new planes continues to weaken.S7 did not give a reason for the cancellation but said it “retains interest in using the Dreamliner” and will look to lease the planes instead.

The launch of its new jetliner has been delayed by a two-month strike by machinists and production problems in a row over pay and job cuts last year, which led to the late delivery of around 70 planes.

Chairman Jim McNerney said: “The global economy continues to weaken and is adversely affecting air traffic growth and financing.”

Boeing yesterday reported an unexpected fourth-quarter loss and forecast 2009 earnings well below estimates as it struggles with a dip in demand for its planes amid the downturn.

It reported a quarterly loss of US$56 million, compared with a profit of US$1.03 billion for the same period a year earlier.


Airlines are adding to Boeing’s woes, with many expected to defer or cancel orders as travel demand slumps in the global recession.

Revenue fell 27 percent to US$12.7 billion, mainly because of the strike, which prevented the delivery of about 70 planes in the fourth quarter.
Boeing repeated its target to make the first 787 test flight in the second quarter of this year and first delivery in the first quarter of 2010.

However the new 747 jumbo, which is now also well behind its original schedule, will not be delivered until late 2010.